People are too much concerned about their credit score. This is perhaps because people have lost several credit points during recession. They want to raise their credit score so as to qualify for record low mortgage interest rates. Moreover, it is difficult to get employment in existing job market with poor credit score. Most employers are not ready to recruit candidates with low credit score. So, every single credit point counts nowadays.
You may feel that there is nothing new to know about credit score. Too many articles are circulating on credit score. You've read a few of them. Apart from that, you've heard so many things about credit score from your friends and relatives. Well, you may know a lot of things about credit score. However, are you sure that what you know is correct? This is because too many myths and stories are there in the web world. All are not correct. You need to demarcate between the myths and facts. Otherwise, your credit score can very well suffer in future.
Here are some credit myths that you need to know and stop believing in them.
1. You should try to pay off old debts as soon as possible:
Morally, you should pay off your old debts. Legally, you're not bound to pay off debts which have crossed the Statue of Limitations (SOL) period. The creditor/debt collector can't go to court to squeeze money from you. However, once you make a payment, the SOL clock will re-start on the debt. This means that the creditor/collector can sue you for payments.
If a debt is not showing on your credit report, then its best that you don't make any payments at all.
2. Your credit is absolutely fine as you didn't commit any mistake:
You have always taken special care of your credit. You have taken the right steps every time. However, this is not enough to retain a good credit score. Nearly 70 percent of the credit reports contain mistakes. So, your credit report may also have some wrong information in them. If you don't get them rectified soon, then you'll have to pay high interests on loans.
3. There is nothing to worry. Your credit report does not contain errors.
You've checked your credit report. You didn't find any error on your credit report. So, you're quite confident that your credit is good. However, you're forgetting that you've seen only one credit report. You need to check other credit reports as well as they may contain wrong information.
4. You can glance through your credit report for free
You can view only one credit report for free through various websites. As far as website like freecreditreport.com is concerned, they charge a fee to give you a glimpse of your credit report. You can only view your credit report at annualcreditreport.com once a year. A lot of people think that their credit score will drop if they view credit reports several times in a year. This is wrong concept. You can check your credit report as many times as you want in a year. Your credit score will not drop because of this.