Myths about your credit score

0

LANSING, Mich. (WILX) — When it comes to your credit score, there are many misconceptions.

Related: Monitor your portfolio – Fix your credit score

About half of all Americans believe that having a small credit card balance is better for a credit score than paying off the balance in full each month. It’s a myth.

According to Sara Rathner, personal finance expert at Nerdwallet, this just leads to unnecessary interest charges.

“It shouldn’t cost you money to increase your credit score over time,” Rathner said. “You can do it for free by paying your credit card bills in full, on time, every month.”

Nearly 2 in 5 Americans think checking their own credit score could cause it to drop, which isn’t true either. Checking your score is important to do and many tools exist to allow you to do it for free.

Half of Americans think closing an old card you no longer use is good for your credit score. It’s a myth.

“It’s so tempting to declutter your wallet if you don’t want to carry all that extra weight around,” Rathner said. “It can be worth keeping an old credit card open even if you don’t really use it much.”

And if that old card charges an annual fee, call the issuer and see if there’s a card with no annual fee you can transfer your account to. Having a long-standing credit card — even one you never use — improves your credit score.

After: Monitor your portfolio

Copyright 2022 WILX. All rights reserved.

Subscribe to our News newsletter 10 and get the latest local news and weather straight to your email every morning.

Share.

About Author

Comments are closed.