Credit Misconceptions and Myths

Credit Clubhouse discusses common credit myths and misconceptions. Checking your own credit does not hurt your score, and it's important to monitor your credit regularly. Carrying a balance on your credit card is not necessary to build credit; paying your bill on time is what matters. Closing a credit card can actually lower your score. Bad credit does not last forever; negative items can be removed and credit can be improved over time. Understanding these facts is important for building and maintaining good credit. Welcome back to Credit Clubhouse. I'm Sherea, your trusted source for all things credit. In our previous segments, we've explored the benefits of good credit and how it can impact your financial goals. Now it's time to debunk some common credit misconceptions and myths. Well, you know, credit can be a mysterious subject and misinformation often circulates but let's just set the record straight. The first myth, checking your own credit hurts your score. This is completely false. When you check your own credit, it's considered a soft inquiry, which doesn't impact your credit score. It's a responsible practice to monitor your credit regularly. As of right now, you're able to go to inyourcreditreport.com and actually get access to your credit report. Now, myth number two, you need to carry a balance on your credit card to build credit. Not true. While responsible credit card usage is essential, you don't have to carry a balance and pay interest to build credit. Paying your credit card bill in full and on time is what matters. There's a few extra tips to that, but just know you don't have to carry a balance. Another common myth is that closing a credit card will boost your score. In reality, it can have the opposite effect. Closing a card may reduce your available credit, which can increase your credit utilization ratio and potentially lower your score. It can also affect your credit age. But let's address a big one. Bad credit lasts forever. This is a myth and can be discouraging. When negative items in your credit report do impact your score, they typically have a statute of limitations and can eventually be removed, as well as there's other laws that can assist you with removing inaccurate information from your report. Credit repair and responsible financial management can help you improve your credit score over time. Remember knowledge is power. By dispelling these myths, you can make informed decisions about your credit. Building and maintaining good credit is a journey, and understanding the facts is your compass. In our next segment, we'll dive into practical steps for maintaining and building good credit. So if you're ready to separate fact from fiction and take control of your credit journey, keep listening. Thank you for joining us in this segment. Until next time, this is Sharia reminding you that with knowledge, you can overcome credit myths and pave the way to financial success. Signing off.