MYTH #12: A serious financial crisis like a foreclosure, short sale deed-in-lieu or bankruptcy will hurt your score for 7 years. Foreclosures will remain on your credit report for 7 years, bankruptcies 7 – 10 years depending on whether its a chapter 7 or 13. There are ways to reestablish your credit and raise your score after a financial crisis.
MYTH # 13: FICO scores are locked in for 6 months, and they change every 6 months. That’s a huge myth because your credit score is based on the data right there at the time that the credit is pulled. The calculation is changed every time your score is pulled.
MYTH # 14: “I don’t need to check my credit because I pay my bills on time.” The reality is that 85% of credit files contain errors, and often are merged with someone with the same or similar name. So you need to check you report often for errors as well as Identity Theft.
MYTH # 15: “Checking my own credit report harms my credit standing.” There is a difference between a hard and soft inquiry. A hard inquiry is one that is done by a lender to evaluate whether or not they want to give you new credit. That is the type of inquiry that will hurt your score; that will affect your score. But you can pull your credit as often as you want , and it won’t affect your score negatively at all.
MYTH # 16: Consolidating into a low interest credit card will increase your score. The interest rate of your cards have no effect on your score at all.