It’s important for Georgia Consumers to have their facts straight when it comes to credit. Getting the right information about your credit reports and credit score will help you to maintain good credit or repair bad credit. Unfortunately, there are a lot of misconceptions about credit scores out there, and sometimes it’s hard to separate fact from fiction.
Credit Score Myths that Georgia Consumers shouldn’t Fall For when Working to Build or Repair Credit
Earning and maintaining a good credit score is hard enough without having to deal with bad information. However, if you find out that you’ve fallen for a credit score myth, you’re not alone. According to the results of a recent survey conducted by NerdWallet, plenty of Americans believe things about credit scores that simply aren’t true. It seems that there are a lot of good consumers, in Georgia and every other state, who’ve been the victims of bad information.
1 – You are born into this world with a “perfect” credit score.
11% of Americans surveyed by NerdWallet believe that you start with an excellent credit score that only drops if you make mistakes. If this were the case, a lot of people would be tempted to never use credit until they wanted to buy a car or purchase a house. The truth is, however, that you don’t even have a credit score until you’ve used a credit card, taken out a loan, or engaged in some type of credit activity. This is why young people sometimes have a tough time when it comes to financing big purchases: Having no credit is almost as hard as having bad credit.
2 – If you have a 600 credit score, you’re doing just fine.
About 20% of U.S. consumers think that a 600 credit score is high enough to qualify you for any loan or credit card, but a 600 credit score is actually considered “subprime.” There are many different credit scoring models being used, but a typical credit score range is 300-850. Having a credit score that’s higher than 640 will pull you out of the subprime category, but it takes at least a 700 to qualify for good interest rates on loans and credit cards.
3 – Checking your credit reports hurts your credit score.
Approximately 12% of American adults have never checked their credit reports. Many of these consumers probably haven’t checked because they think that doing so will bring down their credit scores. This couldn’t be farther from the truth. If you apply for a loan or line of credit, the credit check that the lender does will cause a temporary drop in your credit score. Checking your own credit reports, on the other hand, results in a “soft pull” that has no effect on your credit score.
4 – Carrying a credit card balance will improve your credit score.
Two out of five American consumers believe that the only way having a credit card will help your credit score is to constantly keep a balance. This is not the case. Being active but responsible with a credit card can build good credit, but you don’t have to carry a balance. You can pay your balances off every month and build a great credit score – AND not have to pay interest charges.
5 – If you want the best credit score possible, you should max out your credit card than pay it off.
Responsible credit use isn’t about using as much available credit as possible. In fact, using too much credit can actually hurt your credit score. Ideally, your balances should be kept at 30% or below your spending limits. Using too much of your credit at one time will make lenders think that you’re spending beyond your means and doubt your ability to manage a new loan or credit line. So, if you do have high balances, paying them down is a good way to immediately boost your credit score.
6 – Only credit mismanagement can cause your credit score to drop.
Not paying your bills on time or abusing credit can hurt your credit score, but sometimes your credit score will drop for reasons that are not your fault. Errors on your credit reports can cause significant damage to your credit score, and you may not even know they’re there. This is why Georgia consumers should frequently check their credit reports from all three major credit bureaus. According to the Fair Credit Reporting Act (FCRA), any inaccuracies that you find on any of your credit reports can be disputed and removed.
The credit report error disputing process is easy when you have a FREE credit repair lawyer to help you deal with the credit bureaus. This is why Georgia residents who want to get a head start on credit repair with cleaned up credit reports should contact Credit Repair Lawyers of America.
The Free and Legal way to Get Better Credit
Don’t let errors on your credit reports bring your credit score down. At Credit Repair Lawyers of America, we’ve been cleaning up credit reports for consumers since 2008 for free. How do we do it? All of our fees come from the defendants in cases that are settled. This is why our clients pay nothing for the work we do.
Let’s start the conversation about what we can do for your credit. Set up your free consultation today by calling Attorney Gary Nitzkin at (404)591-6680 or sending him a message through our contact page.