Credit score myths that can harm financial health 

With so much information on the internet on credit scores what's really important when it comes to making improvements here's what you should know about some of the most common credit score myths

Number one: Checking your credit will decrease your overall score 

anytime you apply for credit you are providing lenders permission to obtain copies of your credit report from a credit bureau when you pull your own credit report this is considered a soft inquiry and does not have an impact on your score applying for a new credit line requesting a credit limit increase financing a car or purchasing a home are all examples of hard inquiries.

Number two: Closing credit cards help your credit score 

Remember that credit card from college with the 500 limits don't be so quick to close this account keeping this card shows lenders you have the ability to keep a line of credit open for a significant amount of time while remaining in good standing using the old faithful for gas groceries or smaller purchases 

Number three: There is only one credit score 

your fico score is used in about 90 % of lending decisions such as purchasing a home or buying a new car and can range from 300 to 850 the five factors that determine this score are as follows payment history amounts owed length of credit history 

New credit and credit mix payment history accounts for 35% of your score and measures how punctual you are when it comes to making timely payments amounts owed is 30% of your score and this evaluates

How much of your credit limit you use versus what's the available length of credit weighs in at 15% and looks at how long you've been managing credit both credit mix and new credit accounts for 10 % of each 

Takes a look at how often you apply for new credit plus how you handle varying types such as loans and credit cards the vantage score was created by the three major credit bureaus Experian TransUnion and Equifax in 2006. 

While it takes upwards of six months to generate a fico score it only takes one month of credit history for a vantage score while both the fico score and vantage score take payment history into consideration the vantage score places emphasis on other key factors such as credit utilization and credit age 

The advantage score crosses most credit industries with the exception of the mortgage market varying lenders landlords and financial institutions use this to determine creditworthiness credit is very important and the more you know the more conscious you are.

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