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Misinformation on credit score

By Ruth Racey
Published: Sunday, May 20th, 2012

Hurting your credit score is the worst thing you can do about yourself. Once you have injured your credit reports because of irresponsibility and delinquency on payments and other unfavorable factors, it may take you a long time before you can actually heal the wounded score. This is why consumers are advised to be very careful about hints of fraud because the crime infuses damages that are difficult to deal with.

However, there are instances when all you think about is saving your scores and you end up hurting them more than you could ever imagine just because you were fooled by wrong information. Yes, there are also wrong advises out there that can cost you so much money without you even knowing and you just realize in the end that you have been misled.

One of the most common wrong information that has been made about your FICO score is that it could be improved by closing your accounts. The confusion is created by the fact that having too many accounts can hurt your score. This could be true but closing your many accounts cannot repair what have been incurred in them while these were still active.

The computation of your scores is not just based on the accounts you have opened but also on your payment history. So whatever it is that is included in your history will appear whether you have closed them or you opt to have them active. Losing your account is not the solution. You definitely have to settle your debts and leave a clear credit history.

It is also advisable that you get a copy of your report so that you can check on instances of fraud or even question items that are not supposed to be appearing there. Whenever you apply for a new credit, lenders and creditors peep into your reports. If you happen to apply for so many accounts, the mass inquiries made by those whom you applied credit from will be viewed as something damaging to you.

You may not know it but lenders and creditors are authorized to view your reports so that they can have a basis of their decision on whether to approve or decline your application.

Most consumers are already aware that FICO is checked by prospective lenders and creditors but they should also understand that it is not only the FICO that is given enough consideration. Sometimes, lenders get the average from the scores provided by the three main credit reporting agencies. That is why having a good record in all three bureaus should be achieved because lenders have become wiser when dealing with debtors.

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