Don’t Fall For These Common Credit Misconceptions

March 05, 2012

credit score mythsWe all know people who seem to get approved for a new line of credit on a weekly basis. Most of us also have a friend who doesn’t even receive credit card offers in the mail. There are plenty of explanations for why some people have good credit and others don’t, but only a handful of these are factually accurate. If you’re confused by credit myths, keep reading.

In “Credit Confusion: What You THINK You Know Can Hurt You,” the credit experts at FreeScore help sort out some of the more common misconceptions about credit scores.

This blog post cites myths from MSN Money. Do any of these sound familiar?

  • Having lower credit limits makes you more attractive to lenders. Actually, lenders look at how much you spend compared to how much you could be spending. This debt-to-credit ratio helps determine your credit worthiness and is a good indicator of how likely you are to spend beyond your means. Lenders will look more favorably at a borrower who only spends half of a $10,000 limit versus someone who spends 90 percent of a $5,000 limit.
  • Checking your credit will lower your scores. While it’s true that certain types of credit checks will lower your scores, checking your own scores won’t affect them at all. In fact, using services like FreeScore to check your credit reports regularly for errors and inaccuracies is a good idea.
  • Carrying a balance on your cards will help increase your scores. When lenders pull your credit reports, they only see the amounts of your last monthly statements. They don’t know whether you paid off the full bill or only made the minimum payment. If you have the means, carrying a zero-balance will help you avoid unnecessary interest charges.

For more information on how credit scores are calculated, has many helpful articles, tools and calculators in its credit information page. If you’re interested in knowing where you stand at the TransUnion, Experian, and Equifax credit bureaus, sign up for services from FreeScore.  With the Power of 3, you’ll receive unlimited access to your credit scores and reports at all 3 bureaus. In addition, you’ll gain peace of mind knowing that your credit is protected with 24/7 monitoring and automatic alerts that notify you of any suspicious activity on your accounts.

Categories: Economy, Education

About The Author

Read All Stories By Mitch Levinson

Mitch Levinson is the author of “Internet Marketing: The Key to Increased New Home Sales” published by BuilderBooks. He is an Internet marketing expert with expertise in search engine optimization, website development, email marketing, social media and CRM consulting services. He is known for creating effective programs that can be tracked through analytics to prove effectiveness and ROI. Mitch is founder and president of MLC New Home Marketing and MLC FlatFee Realty, as well as managing partner of mRELEVANCE, LLC, a Marketing, Communication, Interactive agency with offices in Chicago and Atlanta. He currently leads the Chicago team. A Multi-Million Dollar Sales Producer who earned an MBA in Computer Information Systems and eCommerce, he brings a unique perspective and experience to the field of real estate communications. Mitch combines the two interests in order to help home builders and developers gain a competitive advantage through the Internet and technology. When he isn’t behind a computer, he enjoys participating in sports and coaching his kids’ teams. Mitch resides in Arlington Heights, Ill., a northwest suburb of Chicago, with his family, which includes two rambunctious labs. Visit my Google+ profile.

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