Busting the Top Three Credit Myths

When it comes to your credit, don’t believe everything you hear. Plenty of rumor, gossip and innuendo surround the real facts about your credit report and score. Luckily, there’s John Ulzheimer, On the Money’s credit guru.

On Tuesday’s show, Ulzheimer revealed – and dispelled – the top three credit myths:

1. Closing credit cards does not improve your credit score! In fact, it is more likely to lower your score, Ulzheimer said. Credit agencies do not penalize you for having lots of available credit. This is one of those myths that never seems to go away, he said.

2. The three credit bureaus do not contain the same data. They compete, they don’t cooperate. So if you notice a mistake on your Experian and Transunion credit reports, you need to contact both agencies to fix it. The last thing you want is disproportionate credit scores, according to Ulzheimer.

3. Income and employment do not impact your credit score. Income is a measurement of capacity, while your credit worthiness is a measure of whether or not you actually will make your payments. (It’s not how much money you have, it’s how you manage it.)

If you have a question about your credit score, John Ulzheimer will be in our Forums all this week. Drop in and ask him a question by clicking here. Not a member? Sign up here. It’s free and it only takes a minute.