Credit-Building MYTH vs FACT

MYTH – Spending more money is better.

This may sound sensible at first. After all, you have to spend money to build credit right? But not in the way you think. Having a high balance on your cards will actually hurt your score.

FACT – Try to use 30%-40% of your max credit limit as a rule of thumb.

MYTH – It’s ok to miss or be late on a few payments

Although a low-occasion late payment may not be too harmful, constantly being late makes a harmful impact on your credit score.

FACT – Making your payments on time has a positive impact on your score, and accounts for 35% of it!

The more you know about your credit, the easier it is to maintain a higher score.

MYTH – Checking your credit score lowers it

Checking your credit score is a soft inquiry, meaning it does not affect your score.

FACT– Hard inquiries, such as loan applications (credit cards and mortgages) DO affect credit.

MYTH – You need an agency to repair your credit

Although you can use an agency to do this for a fee, you can also do this yourself.

FACT – You can dispute items on your credit report for free at annualcreditreport.com

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