Credit Score Myths – Fact or Fiction? (Probably Fiction)
Since the discovery of what makes a credit score tick, there’s been a number of myths that just won’t die – or ones that have popped up since all the facts have been revealed. It’s important to know which ones of these are legit and which ones are just people talking.
Checking Your Own Credit Hurts Your Credit Scores
No, it does not. Checking your credit scores doesn’t exactly increase anything, but checking on them yourself definitely doesn’t decrease anything, either. Hard inquiries, like the ones that credit card companies and car salesman make, can deeply affect your credit if there are too many of them made over a period of months. Otherwise, your credit is safe, and you can monitor it eight times a day if you’d like.
You Have to Carry a Balance to Make Your Creditors Happy
No, you don’t. There is a myth going around that says to keep your creditors happy, you have to carry a 30% balance on your credit cards at all times. Though credit card companies like seeing payments made every month, they don’t even really know how much you have on your credit cards, or even if you’re paying an account in full. So just pay them all off and don’t carry a balance at all and do yourself a favor.
Don’t Shut Down An Account
Yes, please shut down the account. Over time we’ve discovered that having fewer credit lines doesn’t negatively or positively affect your credit score – it’s all about credit utilization. If you have maxed out 90% of eight accounts or 90% of two, it affects your credit score negatively, period. The number of accounts doesn’t matter, so shut down account and stop spending on it today.
All Credit Scores Are the Same
No, not really. There are so many ways to score you and your credit it would make anyone’s head spin. Even the FICO calculation itself can be calculated in different ways with a difference in a score up to 75 points, and when compared to other formulas that aren’t FICO approved, the difference can be hundreds of points. The credit score the company that pulls your score sees on any given day is probably ballpark, but usually not anywhere near exact.
Author Bio: Elizabeth Roque is an in-house writer for Franklin Debt Relief. She presents information about debt relief services, credit card debt reduction and getting out of debt on a variety of financial sites online.
Getting a Car Loan
Although a customer can make his or her automobile last a very long time, the automobile will not last forever. Eventually, repair costs will exceed the value of the consumer’s trusty old vehicle.When that happens, it will be time for that person to apply for a car loan on sites like http://www.comparethemarket.
Is a car Payment in the Budget?
Having a shiny new car is everyone’s dream. However, no one should take on the responsibility of a car payment unless he or she has the funds. Before a consumer even meets with a dealer, that person should draw up a financial profile. He or she should make a rough sketch of his or her income and expenses. If there is extra money available after paying bills, squaring creditors and shopping for food, then it might be possible to take out a car loan. In addition, the individual should jot down the exact amount available for making this payment. He or she will need this amount for negotiating with the dealerships.
How is the Credit Score?
A person’s credit rating will affect the down payment and monthly payment terms. The credit score will also determine what kind of lender the customer will work with. A debtor can obtain a copy of his or her credit report by contacting the credit bureau. A good to excellent credit rating would indicate several possibilities for auto financing. A poor credit rating might mean the consumer has to work with a buy here pay here type of company or a short-term finance company.
Bad Credit Auto Financing
Getting a car loan when one has bad credit is not difficult. However, the terms set by some companies may be impossible to meet. The consumer should perform careful research, as there are many opportunities available. The individual should never take on an extensive payment. The objective is for the person to pay off the loan eventually. Therefore, the consumer should make sure he or she is in the position to make timely payments on the vehicle.
The Relationship With the Vehicle
The relationship with the vehicle is the most important aspect of an auto finance deal. The individual will be obligated to pay for this car for several years. That person should not sign any agreements for an automobile that he or she does not absolutely adore. Most finance agreements cannot be reversed after a certain amount of time. No one appreciates being stuck with a car he or she does not like very much. The consumer should choose a vehicle for which he or she has a great passion. That way he or she will have the energy and the drive to fulfill the agreement and become the new vehicle owner.