When it comes to credit, there’s no shortage of misinformation. Many people make financial decisions based on myths that can actually harm their credit scores rather than improve them. At Ole Hill, we believe in empowering individuals with the right knowledge to take control of their financial future. Let’s debunk five of the most common credit myths that could be holding you back.
Myth #1: Checking Your Own Credit Hurts Your Score
Many people avoid checking their credit reports because they fear it will lower their score. The truth is, when you check your own credit (also known as a “soft inquiry”), it has no impact on your score. In fact, regularly reviewing your credit report helps you catch errors, detect fraud, and monitor your progress as you work to improve your score.
Myth #2: You Only Need Credit If You Plan to Borrow Money
Even if you don’t plan on applying for a loan or credit card, your credit score still plays a crucial role in your financial life. Landlords, insurance companies, and even employers may check your credit history. A low score can lead to higher insurance premiums, difficulty renting an apartment, or missed job opportunities.
Myth #3: Closing Old Credit Accounts Will Improve Your Score
It might seem like closing old accounts is a good way to manage your credit, but this can actually hurt your score. Closing an account reduces your available credit and shortens your credit history, both of which can negatively impact your credit score. Instead, it’s often better to keep older accounts open and occasionally use them to maintain a healthy credit profile.
Myth #4: Paying Off a Collection Account Removes It from Your Credit Report
While paying off a collection account is a positive step, it doesn’t automatically erase the record from your credit report. The collection will typically remain on your report for up to seven years, though its impact lessens over time. The key is to work on building positive credit habits moving forward to offset past negatives.
Myth #5: All Debt is Bad
Not all debt is created equal. Responsible use of credit, such as maintaining low credit card balances and making on-time payments, can actually boost your credit score. Installment loans, such as mortgages or auto loans, can also contribute positively when managed well. The key is to use credit wisely rather than avoiding it altogether.
Take Control of Your Credit with Ole Hill
Don’t let credit myths hold you back from financial success! Understanding how credit really works is the first step toward building a strong financial future. At Ole Hill, we specialize in helping individuals and business owners repair and strengthen their credit so they can achieve their goals.
Get started today with a FREE credit analysis and consultation!
📞 Call 1800-308-6467 for a FREE credit analysis and consultation!
🌐 Visit www.olehill.com to learn more.
Let’s turn financial challenges into opportunities—together!