5 Myths About How to Improve Your Credit Score

| November 25, 2013

Every adult over the age of 18 has a credit score.  Although it’s mandatory to have one, how you treat yours is up to you.  Having a bad one can be very damaging to your prospects – getting a mortgage, taking out loans, buying goods on higher purchase etc. – but it can also be very difficult to improve.  Many sites around the web offer up quick solutions to improving your credit rating, but the sad truth is that many of them are simply not true.  Here are 5 myths you shouldn’t trust.

Closing Old Accounts Improves Your Score

Many people believe that if you have old bank accounts open which you don’t use, they’ll affect your credit score in a negative way.  This is untrue, and in fact, some experts believe that the opposite is more the case.  What really happens when you close your old accounts is that you lessen your credit history, and this means that there is less data for your creditors to assess when they’re building your report up.

Checking Your Score Effects It

The myth that checking your credit rating somehow lowers it is particularly damaging because it prevents people who could benefit from viewing their reports from doing so out of fear.  Take it from us: checking your credit report has absolutely no effect on it.  So if you’ve not been looking through fear that it could have a damaging effect, now is the time to open up a site like Experian and check your credit score.

Good Financial Heath Equals High Credit Score

One persistent myth which is difficult to bust is that having good financial heath is your ticket to a good credit score.  Although it’s true that paying your bills on time and never going into your overdraft are a good ways to start improving your score, it’s not the end of the story.  To improve it you need to take out forms of credit and then pay them back responsibly.  A good place to start would be to take out an interest-free credit card and use it regularly for small purchases such as your weekly food shop, that way you can predict how much you’ll need to payback each month and it won’t be a shock.

Searching for Insurance Policies Effects It

Similar to how checking your own credit score doesn’t affect it, having insurance companies look at your credit rating whilst you size up their policies is not damaging whatsoever to your credit score. What is damaging is if you apply for credit and then you fail, as it shows you’re impatient.  So if you’re looking for insurance, give a company like Towergate Underwriting Group Limited a call.

Old Negatives Don’t Count

If you had financial trouble 5 years ago but your credit report has been strong ever since, you’re still likely to have the negative points on your report.  This is the condensed point of this article: to tell you that there are no quick fixes when it comes to improving your credit score.  Maintaining consistent and timely payments is the only way to have a good credit report – don’t be fooled.

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