Three credit myths your bank wants you to believe
Crux note: Today we’re sharing part of an essay from one of our favorite weekend publications, The Sunday Refresh.
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From The Sunday Refresh:
Today, we’re am debunking three common credit myths. Not only are these myths costing you money, but they’re putting your good credit at risk.
Let’s start with…
Myth No. 1: I should carry a small balance on my credit cards.
Calling this terrible advice doesn’t do it justice.
Some people think that you don’t build credit history when you pay your balance in full each month and that you need to maintain a small balance to acquire history.
Just using your credit card builds history. And if you pay the balance off each month, that shows potential lenders you’re responsible. If you’ve followed this sort of nonsense advice, you’re wasting your money and hurting your credit.
You’ll owe interest on whatever balance you leave. While it may not be a lot, that will add up over the years…
Myth No. 2: Checking my credit report/score hurts my credit.
There are two types of credit inquiries – “hard” and “soft.”
A hard inquiry typically happens when you apply for a loan, credit card, or mortgage and the lender or issuer checks your credit. Although hard inquiries can impact your credit score, one won’t do much.
However, if you’re regularly getting hard inquiries and no loans, that will damage your credit as it shows you’re likely a credit risk.
A soft inquiry includes things like employment verification or checking your own credit score and credit reports.
Nowadays, most credit-card companies will give you your credit score for free, and keeping track of your credit reports is the No. 1 way to catch identity theft.
The third myth is one many folks still believe, and one you need to read immediately. Click here to read the full Sunday Refresh essay. And if you want to start receiving The Sunday Refresh weekly, click here to get started.