5 Lies About Your Credit Report
Your credit report is important and because of that, a lot is written about it as well as talked about over dinner or as topics of water cooler conversations. Although some of the advice comes from well-meaning people trying to help, misinformation or failure to go to trusted sources could make for some unfortunate surprises if you were to later view your credit score.
1. Once I pay off the collection agency, it will leave my credit report
Wouldn’t that be nice? In most cases that’s not true. Once you pay off a debt that was in collections, the best you can hope for is the debt to be listed as “closed” but often it’s listed as “paid collection”.
When an account is listed as a collection, it remains on your credit report for seven years. Once you pay the debt, it is listed as “paid collection” for the remainder of the seven-year period. It may be a bit of good news to know that the seven years doesn’t start over. The other bright spot is that an account listed as a “paid collection” is not as bad as an unpaid account that was referred to a collection agent.
2. I make my minimum payment. That’s good enough
Not true. Although paying the minimum balance is certainly better for your credit than not paying at all, those outstanding balances are strikes against you when your score is calculated so paying off the debt in a timely manner is the only way to help your credit score.
3. Only errors involving money affect my credit score
Once again, not true. What if your credit report has a wrong middle initial and the information in your credit report is actually the information of somebody else with a bankruptcy on their report? Fixing errors on your credit report takes a lot of time and if you wait until you try to qualify for a loan, you may have to reapply at a much later date. Check your credit report today.
4. I shouldn’t shop online because it’s not secure.
This one may be true but there are ways to check. Anytime you are entering sensitive information into a website look at the address at the top of your internet browser. If the address begins with “https” the site is secure and you’re safe to shop online. If it only says “http” do not enter any information about you or your credit card.
5. Debit cards are as safe as credit cards
Fraud protection and other safeguards that come with credit cards are quickly being adopted for debit cards but your debit card is a direct line to your bank account where a credit card is not. If somebody steals your credit card information, they may run up a balance but you still have money in your bank account until the problem is resolved. That’s not the case with a debit card.
Remember, don’t believe everything you hear and verify everything, including the information in this article, with a trusted source before you make financial decisions based on it.