Improving Your Credit Score – Get Your Facts Right
There are a lot of people trying to improve their credit scores, and tons of advice on how to do it. It’s sometimes difficult to know whether all the ‘tricks’ to improve your credit score actually work. A general rule of thumb is to compare repairing bad credit to losing weight – it will take time. This means you need to be very careful about any advice claiming that you can improve your credit score fast.
That said, you’re still left with a lot of false information going round about how to repair bad credit. This is because many people are misinformed about how the credit score system works. Farnoosh Torabi shares 5 myths that a lot of people believe to be true:
5 Myths About Credit Scores
Ever wonder what your credit score really means or what factors truly weigh on that three-digit number?
If you’re nodding yes, you’re not alone.
There are several misconceptions and myths leading to widespread confusion. In fact, a recent Chase Slate® survey found many of us scratching our heads over what really impacts that score.
To get some facts straight, I spoke with Ethan Dornhelm, senior principal scientist at FICO Footnote (Opens Overlay), the company behind the FICO® Credit Score, which is used in over 90% of lending decisions.
Here are five of the most pervasive myths, debunked. Check out the post here…
There is also some confusion when it comes to shared credit accounts and cards. Credit cards can be shared, so it can help your credit score to be named as an authorized user on a card whose holder has great credit. In such an instance, you can benefits from the card holder’s good behavior.
On the other hand though, college students spending their parent’s money cannot inherit their parents’ good credit, nor can an unemployed spouse inherit good credit from his or her spouse. What about paying off a loan that’s not yours? Will that help improve your credit score? No. Christine Digangi explains:
Can I Get Credit for Paying a Loan That’s Not Mine?
When it comes to building a good credit score, the most important thing to do is make your loan payments on time. Creditors report your payment history on your accounts to the major credit reporting agencies, and a single late or missed payment can knock dozens of points — even as much as 100— off your credit scores. By making payments on time month after month, you’re making huge progress toward a strong credit history.
But what if you’re making payments on a loan that technically isn’t yours? Say your paycheck goes toward paying the mortgage, auto loan or credit card bills, but those accounts are in your spouse’s name — can you get that payment history to show up on your credit reports? Read the full post here…
There’s nothing like a success story to get you motivated to start your journey towards good credit. Tiffany Aliche shares her story, highlighting the importance of gaining financial literacy and developing better financial habits for those in the position she was. Now a well-known financial guru, ‘The Budgetnista’ shares her tips on improving your credit score:
The Budgetnista: Tiffany Aliche shares how she went from a 547 credit score to over 800
As women in and out of the workforce, we have made tremendous strides. We’ve conquered everything from becoming our bosses to leadership roles where we’ve learned how to manage our own teams and work within the parameters of a company’s budget. Yet, there’s one thing that we have quite mastered yet–managing our own money.
That’s right, we live in a time where we spend way more than we make–pushing aside bills and other necessities for that limited edition designer bag, or swiping our credit card every chance that we get, thus putting ourselves in more debt and sitting on a pathetic credit score that will do more harm than we can imagine. See the full post here…
As Tiffany advices, one of the best tools you can have when you want to improve your credit is the right information. It will save you the trouble of possibly ruining your score further when attempting methods that don’t work. Not only that, taking the right steps will soon reflect on your credit score, giving you the motivation you need to keep working at it.