For many people, improving their personal financial outlook is closely tied to boosting their credit scores. After all, a good score can save you thousands when it comes to loans for things like a house or a car. So how can you get there? Through a review of our top mythbuster posts, we’ll show you how to build your credit by dispelling some of the biggest “urban credit legends” about what helps your credit and what harms it.
- Moving balances to multiple cards does not “hide” debt on your credit report; your credit can actually take a hit because lenders can see that you’re opening new, low-interest accounts while your debt levels remain unchanged. Check out our post “Wondering how to repair credit? Here’s one tactic that doesn’t work” to learn why you should skip the credit shuffle.
- While you may have been lead to believe that a higher income yields a higher credit score, a big paycheck isn’t actually required to build your credit. Your score is more apt to be based on how well you manage your credit and factors like your payment history and the amount of new credit you’ve taken on recently. Read our post “Mythbuster: Your paycheck is what affects credit scores” to learn more –including how your employment can affect your credit score.
- There are few things that can leave you feeling more financially accomplished than paying off a credit card balance you’ve been whittling away at. But before you flip the switch to close that account, think twice and read our post “Mythbuster: Should you close a credit card account to improve your credit score?” You’ll learn how keeping your card active can help you continue to build your credit.
- Paying off delinquent accounts is definitely a big part of building your credit, but all isn’t forgiven once that debt is paid. Check out our post “Mythbuster: Once I pay off a delinquent account, does it get wiped from my credit report?” for steps you can take to clear your financial slate after delinquencies have been resolved.
- The myth that regularly checking your credit score can lower your numbers is one that just won’t seem to go away. Our post “Mythbuster: Can checking your credit report hurt your score?” sheds light on the subject while highlighting the financial behaviors that really can damage your numbers.
- As you learn how to build your credit, keep in mind that while your credit score is important, it isn’t the be-all, end-all measure of your financial health. Check out our post “Mythbuster: Is my credit score the only thing lenders look at?” to see what other factors come into play in determining your creditworthiness, and what you can do to turn the financial tide in your favor.
Building credit isn’t something you can do overnight. It requires month-to-month diligence and effort. When you know the truth about credit scores, you can make sure you’re putting that effort toward the right areas.
What myths have you heard about building your credit? Share them in the comments below.
Want more ideas on how to build your credit? Download our free Debt Management e-book now!