Equifax

Finance Blog

Top Five Credit Myths

Written by Diane Moogalian on March 19, 2013 in Credit  |   99 comments

“If I pay off a debt, any associated missed payments can be removed as well.” This is just some of the misinformation floating around about how the credit-reporting industry works. Diane Moogalian, Vice President of Operations for Equifax Personal Solutions, gives insight into these common myths — and arms you with the knowledge you need to navigate your credit file.

credit-mythsMost of the questions I hear from consumers concern the information that appears on their credit report and how it affects their credit score. Unfortunately there’s also a lot of misinformation out there about how the credit-reporting industry works. Here are some of the top questions and myths we see on the Equifax Finance Blog.

1. I pay my bills on time, so I don’t need to check my credit report.

Many people have a general understanding of how to behave responsibly with money. Earn more than you spend, pay your bills on time and be careful about taking on debt. But too often people think this excuses them from checking their credit report. They then check their credit report right before making a major purchase, such as a car or a house. What they find sometimes is shocking: They don’t have much credit or find a new credit card account they had not applied for (a potential ID theft issue). Checking your credit regularly may help you avoid these surprises.

Tip: Did you know that you can access one credit report a year for free from each of the three credit reporting agencies? Go to annualcreditreport.com to pull your free report. You can also order your credit score for a nominal fee.

2. If I pay off a debt, any associated missed payments can be removed as well.

While it is generally a good idea to pay down debt, doing so doesn’t automatically erase any missed payments or delinquencies from your credit file. Missed and late payments are generally removed 7 years from the date of last activity or the date the missed payment was reported by the creditor.

3. I need to carry a balance on my credit cards or shut them down.

While you do want positive account activity, such as paying a credit card bill on time, there’s no need to carry a balance. Simply paying off a small purchase every month (or every few months) will typically trigger the credit company to report that behavior.

4. Credit bureaus are responsible for approving or denying credit.

Credit reporting bureaus do not approve or deny you credit and don’t make any credit recommendations to lenders. The lenders decide, based on their own criteria, to issue or deny credit to you based on your credit report and score, as well as plenty of other factors based on information that you provide to the lender.

5. I don’t have—and have never had—any debt or credit cards, so my credit is fine.

If you do not have any revolving credit cards (department store credit), installment loans (car loans, student loans) or a mortgage, then you probably do not have a credit file. Without a credit history, it is harder for creditors to determine your creditworthiness. You should consider whether it may help to establish credit if you intend to borrow money in the future. Continuing good habits like paying off your debt in a timely manner will help build your positive credit history.

99 comments

  1. H Evans says:

    Will My Credit Scores Go Up As I Zero My Accounts Out, And Keep The Accounts Active.

    • Adrian says:

      Zeroing ur account out will actually have a negative effect you want to keep ur balances below 5% on revolving accounts

      • PES says:

        That is incorrect! I pay off my credit card accounts monthly, and never have a balance. My credit score is 830. Don’t believe everything that you read!

      • Seann says:

        The more available credit you have (proportion of balance to limit) on your open revolving accounts, the less of a risk you are to a potential lender. Your credit card utilization makes up 30% of your total score which is the second highest impact behind making timely payments. FICO scores will increase to their maximum potential in terms of utilization ratios if you can pay credit card balances to $0. However, you want to avoid keeping your accounts at $0 for too long due to the risk of the account(s) being closed by your lending institution. Rule of thumb is to keep new revolving accounts below 10% of their limits for the first six months so you can establish a history with the account. After 6 months, keep them below 30% of their limits. Your credit score is a snapshot of your credit profile at that moment in time so as soon as your credit card balances increase or decrease and report to the bureaus, your score will increase or decrease accordingly.

    • warren says:

      yes.never close a zero balance account. the more available credit line unused the higher your score.

    • Jim says:

      Your scores are based on number of things such as how much you currently owe compared to how much credit you have available. If you have a $50,000 credit line and owe $49,000 you have one score but if you have a $500,000 credit line and owe nothing that is not always good. The bureau can ding your score for having TOO MUCH available credit! That sounds strange but it’s true. Unless you are a millionaire you do need a million dollars of credit. Too many cards with zero balance can actually hurt your score. Keep the oldest cards (good for your score) but get rid of most of the cards you don’t use that are zeroed out. Keep the big ones like Visa and Amex but can the box store cards like Home Depot and Saks. This is just my opinion.

    • Mike says:

      I have found that your credit score will be higher if you carry a balance of 1-10% of your available credit compared to a $0 balance.

      • Josh says:

        If you have bad credit and stuff in collections and missed payments you want to use only 10% of your credit limit for 2 to 3 months and pay the whole balance each month. But if you have good credit scores you might want to leave a small balance on there.

    • J Hill says:

      I’ve learned by experience that keeping your revolving debt below 30% is very important. Anything above that lowers your score. If you sign up for a credit monitoring service you can keep track of how your Credit score fluctuates and how it’s affected.

      • J Hill says:

        To answer your question, yes your score will go up but I wouldn’t zero out the accounts unless you just have too many.

    • J Heaton says:

      To help raise your credit score, make a small purchase each month ($50 or so), and pay it off, either that month, or on the next statement. This lets the credit card company know you’re using the credit, and paying on time. That will trigger them to make positive marks in your record, which could lead to higher credit limit, or lower interest, and raise your credit score.

    • Marcia Santillanes says:

      Mine hasn’t. I pay off any credit card I use each month for the last two years but if anything my credit score went down a little and has stayed.

      • Purple love says:

        The comments above read NOT to zero them out.

        • binky says:

          You say not to zero your credit cards but if you leave ANY balance on them you get charged an interest fee and I don’t know about anyone else but I would rather not have to pay any more than I have to.

          • Anonymous says:

            This is what I do. My due date is the 9th. My report date is the 14th. I pay off whatever balance before the 9th. I charge something that will be about 10% of my credit limit on the 10th. So what is reported every month on the 14th is a 10% utilization. Then I use the card after the 14th and pay that amount off before the 9th again, and repeat the whole cycle. It takes patience and the right amount of planning. Make sure you find out your reporting date is because even if you have a 0 balance on the due date, doesn’t mean that a 0 balance will be reported. You only need to worry about low utilization if your going to apply for new credit.

            You don’t have to worry about getting charge interest if you pay off whatever you charged within 25 days. So if you charged something on the first then you have till the 25th to pay that off.

    • M C says:

      Yes. It means that you have a good/high credit to debt ratio. If you have credit score monitoring, you will see details about how that works, if you do not, I always tell my friends and family to set up with at least one of the 3 reporting agencies and monitor your score. It makes a lot of sense as you watch the activity make little of big changes.

      My husband has a “good” rating, but no credit card and only satisfied accounts… he got a Visa card and used it, paid it, etc. His score went up 20 points in a couple months by having a zero balance on a $3000 limit visa.

    • jw1848 says:

      your scores will gradually increase by paying down to zero balances, paying entire amount on time and keeping accounts active by small purchases on a reqular basis

    • AC says:

      I had an unfortunate situation where I had to care for my mom who had stage 4 cancer & couldn’t pay my monthly bills. I contacted the companies to ask for assistance after rehashing my horrible reality & their advice was to let them default & make arrangement with the collection agency, bad advice, don’t do that. I paid off those with small balances & closed them so I wouldn’t have to deal with them, another mistake, don’t do that either. I had great credit prior to my moms terminal illness & after dealing with her death for two years now & trying to recover emotionally & financially, no bank or finance company is willing to help me so I’m working on building a credit score high enough to buy a home. Companies have no compassion or remorse if you are having to deal with life’s unfortunate realities.

      • jeff says:

        I am sorry you had to go through that. First of all it is a game to them. It’s all about money and numbers. They don’t care about you. You are a name on a computer screen. Get a erasable board and list all you debt. Begin a plan to first get all debt off your back. DO NOT close your accounts because this will help your score. Time will heal this stuff I know I lost everything and had to dig out myself. Be careful to who you listen to. If you look on Equifax it shows you how a score is calculated. You will find some people will work with you, others won’t. Step by step plan out how to begin the process. Consider it the step to a new beginning. I wiped out 90% of my debt. I got some debt collectors to take $25.00 a month. Good Luck.

        • Tom says:

          I had a similar situation of prior great credit history and credit scores and then helping my family with my mother passing. MY credit score went down. I have, for the last 2 years, worked with a credit counseling agency recommended by my credit union. I paid off and closed 10 of 13 accounts. I am now down to 3 remaining accounts (2 credit cards) and upped the monthly payments. My credit score is slowly rising (I use a monitoring service) and I am in the fair/good credit score assessment range. I have 1 1/2 years to go and will be debt free save for my mortgage which has been paid down considerably as well.

    • J Bass says:

      From what I understand, paying your credit card accounts to zero and keeping the balance zero acts similar to paying with cash. If there is no balance on the account when the creditor reports the account, then there is no activity to track. From discussion with a credit counselor at Equifax, it is best to keep a small balance and activity on the card and make a payment on the amount after the activity has been reported to the credit agencies. It reflects that you can manage the cards and keep them under control. I understand that it shows that you have the ability to manage your funds and credit in a positive manner.

    • Anonymous says:

      Here are the FACTS — If you revolve a balance you will get charged interest .. if you pay your balances in full each month you won’t — I work for a bank and review credit bureaus everyday all day and the truth of the matter is — no matter if you pay in full each month or revolve a balance the credit bureaus may STILL report a balance due to the fact as to when that particular bank updates their credit record to that credit bureau company and THEN when that credit bureau company updates their records — those times may vary from month to month from each bank & credit bureau company .. some financial aide sites say use no more than 30% some say 10% others say 50% and the fact is there are 3 different credit bureaus and 3 different scores and 3 very different ways those scores are calculated so if you truely want advise try to contact the credit bureau companies themselves and find out what % of balances used if recommended …. fall short of that continue to pay your balances in full each month to not get charged interest charges .. unless you like paying interest.

    • Cameron says:

      No!

  2. Robin Lewis says:

    How do I get old items at least 7 years old removed from my record?

    • Robert Kaye says:

      I would contact each credit-reporting company including Equifax to notify them of the passage of 7 years.

      • Jim says:

        It’s supposed to automatic for many things but keep in mind a creditor can keep sending in negative information on you indefinitely. If a store keeps reporting you owe them money it never goes away. If they are truly items that have not been active in 7 years you can go online, get a free report and dispute the items that are too old. Remember that some things such as bankruptcies can last 10 years not 7.

    • AniQue Thomas says:

      You have to contact each bureau in writing and let them know that the debt is 7 or more years old and you would like it deleted from you credit profile.. Certain bankruptcies remain on your credit for 10 years…

    • J Hill says:

      Go online to each bureau and dispute the items, there’s a checklist of disputes that you can use and I believe one of them is “Account too old…..”

    • MC says:

      It depends on the item. If you are talking about credit, just as the other comment said… contact and dispute. If you are talking about a public record, I believe they stay on for 10 years. A public record would include a bankruptcy, but the delinquencies associated to a bankruptcy is to be removed after the 7 years… Hope that helps. :-)

    • Mike M. says:

      The law reads that the longest the credit bureau can keep a delinquent
      report on file is 7 years…If you only missed 1 or 2 payments and have since made on-time payments the creditor is likely to remove the late’s as a good will gesture. You must write a nice letter requesting they remove
      the delinquent reports.

    • J Bass says:

      I have been told that disputing an item can take up to 30 days to resolve. Therefore, if you are making application for a loan or refinance, don’t dispute the item until the loan process has been completed. If a file is in dispute it will most likely stop the loan process.

  3. Christine says:

    Which is the most trusted company to assist you with getting your credit report corrected as it has accounts listed which were involved in ID Theft?
    Thank you

    • EFX Moderator, EM says:

      Christine, I’m sorry that you’re a victim of identity theft. You’re right to get your credit report corrected as quickly as possible. Each credit reporting agency will have a way to file a dispute. You may also want to consider credit monitoring services. I hope this helps.

    • Brad says:

      None, they’re all scam artists.

      All you have to do is write the credit reporting agency and within 30 days they’ll have it correct.

  4. Ellen says:

    Credit scores don’t make any sense to me. Owning a house and 3 cars, having paid off the mortgage and car loans, having no debts, using only one credit card and 2 debit cards, never any late payments and still having a lower credit score than a person with a mortgage, car payments and even some late payments doesn’t make any sense to me at all.
    Good behavior is not rewarded. Only spending is being rewarded.
    Time to change something about this entire financial system. I’m disgusted.

    • Bill says:

      Ellen, Much of it to me seems to be counted on your responsibility to paying you’re debts on time and not abusing credit limits. Having done a fine job paying everything looks great for past debts but since you have little to no debt now there could be uncertainty to your habits of responsibility toward paying debt today. In short, it’s not about how good you were paying off debt yesterday…it’s about how good you’ll be at paying debt tomorrow. Crazy isn’t it?

    • Don m. says:

      Yea, me too. Paid off my house and my score took a nose dive. This credit score is all about spending money not about paying off your loans.

    • Dave S. says:

      Also, be aware Ellen, that FICO measures how you interact with credit. FICO’s customers are large lending institutions–you and are NOT a FICO customer. FICO does not measure how smart you are with your finances or whether you are making prudent financial decisions. There are sensible money steps to be taken (e.g. pay off the house early and put the extra money into a tax priveleged retirement account) that will actually cause your FICO score to drop.

    • ernest says:

      Just my opinion but when you paid everything off and stop using credit you sent them message you didn’t need them. There in business to make money want good credit score then I would assume you need to actually use your credit. Doesn’t mean buy stuff you don’t need. just means some times use charge card for stuff you have all ready planned in your budget and pay it off within 25 days. As for these people saying allway carry a balance lenders aren’t stupid this can show card dependant. To me best message to send is a few good size purchases a year of things you would normally buy. To Get better credit limit offers. Small average use an paying the balance off after 1 or 2 months to increase score. To me carrying a balance month to month is bad for business don’t care what percentage it is. Yes they make profit but person with cards never paid off are more likely to get traped when stuff goes down hill.

  5. Anonymous says:

    Same old credit 101 article. When will someone start writing articles with more in-depth information?

    • Anonymous says:

      Unfortunately the formula is such a big secret that it’s a huge guessing game. Thus, these articles can only give general advice.

    • ernest says:

      No secret its a card game. Learn the rules to the game. If you got no credit or bad credit. Spend 30 dollars get a 3-1 credit report read every thing on them and dispute personal information that is not correct. Dispute any thing on it that’s not yours. Dispute any credit 7 years or older or even mislabeled. If bad credit don.t bother taking a hit filing for new credit. Go to bank get a account if you don’t have one. keep it open for 3 yrs or more. while there get 2 secured bank credit cards without annual fee,s should never pay fee’s when using your own money. Use them opposite months pay off one use other one till your scores in the fair margin. Once in the fair margin try to obtain a non secure no annual fee one. Keep it caught up and on time. Cancel one secured bank card but keep other open it will be your longest account. You will show payments on time and create a credit history plus know whats on your credit report it can cost you.

  6. Jim Gilmore says:

    Do creditors such as the CC companies have the flexibility to remove a late payment or are they bound by some regulation to leave it on your record for the full 7 years?

    • EFX Moderator, EM says:

      Jim, It’s up to the lenders what is reported as they collect the information to send to the credit reporting agencies. Here’s more information on how your credit report is updated: http://blog.equifax.com/credit/credit-report-update-how-is-information-updated-on-my-credit-report/

    • Anonymous says:

      CC have the ability to remove late fees, and if it was reported they also have the capability to send a letter to the bureaus reporting it has been removed. Just call the company and ask

    • Colin Benner says:

      The owner of the debt can do whatever they want with the reporting, as long as they are not reporting untrue negative information. If you have had a recent positive history with a company, and missed a payment a while back, there is nothing wrong with asking them to remove it. They are not required to though.

      Additionally, if you have collections, a common negotiating tactic is called “pay for delete”. Many collections agencies will agree to remove the negative information from your report if you pay. Just make sure you get that agreement in writing.

    • Jorge says:

      Mr. Moore, yes the credit companies have that flexibility. I have had my cards for a very long time. I have actually missed a payment once a year. I got scared the last time this happened and l looked at my report and the company had me in a good standing with payments. They will forgive a couple days late, but once it get over a certain amount of days that’s when they dock you. I will say that having had a CC from when I was 18 and now being 23, I have learned the ins and outs of this credit score things. I can lose points and game them back and then some. Ellen I do agree with you, it’s disgusting to hear that you have been financially responsible and your credit report doesn’t reflect that. I think it’s time you start making strategic purchases to help your credit score. I always tell my friends who don’t have the understanding of how credit works, buy yourself something nice that you can pay off in six months. Make sure it’s not over 30% of your available credit, and that will reflect as a revolving account. It will make your score go up, trust me.

  7. Shirley Jones says:

    How do you get collection items that were previously filed in bankruptcy removed ?

  8. Christine says:

    How long before a bankruptcy is taken off? Is that 7 years also?

  9. Sam says:

    Thanks for these tips, they are very helpful. Great insight to what people need to know about how the credit bureau operates.
    Good job Equifax team.
    Sam.NY.

    • EFX Moderator, EM says:

      Sam, thanks! We’re really glad to hear that this information has been useful to you. Thanks for posting and come back again soon.

  10. obe 127 says:

    7 years is a myth also there is no time frame it could take less time. 7 years is a maximum number of years.

    • Colin Benner says:

      If it was reported to the credit bureau it will remain for 7 years, unless the creditor ask to have it removed, which rarely happens. 7 years for removal of most negative entries is a fact, not a myth.

  11. Tom says:

    Is it possible to have negative mortgage activity due to a divorce or uncooperative ex-spouse removed if the debts are paid off in full? Is this done through credit repair steps initiated by me to the credit companies?

    • Les G. says:

      I have encounterd issues with 3 credit cards going into default due to a divorce. The account has now been paid in full. How can I have them removed from my credit reports? Les

  12. Brenda Warren says:

    I learned the hard way … was told I had way too many credit cards, even though they were always paid on time, and many had zero balances. i was told my credit would be better if I closed some of them, so I did close the ones I used the least often. WHAT NOBODY SAID WAS, KEEP THE OLDEST ONES!!! I closed a Sears account I had good standing with, had had for 20 years but simply wasn’t using and my credit scores went down! Wish I had known.

    • EFX Moderator, EM says:

      Brenda, You’re right that the average length of credit history can affect your credit score. It helps to maintain active accounts for a long time. Click here for more information on how your credit score is calculated. Thanks for posting.

  13. danman says:

    The best thing to do is not worry about your credit score. Your credit score is not a measure of what you are worth. It is a measure of what you can borrow. Do you really want to pay a credit card company interest in order to improve your credit score? Then why carry a balance and potentially expose yourself to risk in case of an emergency? A high credit limit is not a sign of wealth. Wealth is a sign of wealth. Save your money. Be frugal. Borrow as little as possible. Don’t buy on impulse. Learn to be satisfied with what you have. You will be happier in the end.

  14. dennis says:

    one of my collections debts was sold to another collection company and I paid it off now if the first one does not own it anymore should it be removed from my credit file?

  15. Mehram says:

    I have settled out three accounts from identity theft how can
    I make the credit score go back up?some one told me use prepaid credit cards

  16. William says:

    Is it true that closing a revolving account has a negative impact on scores?

    • Warren B. says:

      Yes, if the credit (revolving) debt capacity is not transferred to another revolving acct (ie. credit card). If you cancel a card, have the credit capacity moved to another card.

  17. Parrisel says:

    I have an average credit score and am interested in raising it. I have revolving credit and installment loans that I pay on time but am afraid its not enough to raise it to where it needs to be to get my current mortgage in my exs name to be refinanced to my name a year from now. What are some of the things I need to do from now until to raise my score higher?

  18. Alan B. Sadler says:

    There need to be new laws passed that affect credit scores. How much sense does it make to pay a credit card down to zero and have your credit adversely affected? The general public has no idea about about the formula utilized in creating credit scores and lives are affected every day by these 3 agencies.

    • J Bass says:

      I understand your concern. However, IMHO, we have enough laws infringing our our personal rights and freedoms. I’m sure there are other ways we can resolve the problem.

    • dale says:

      Seems to me the more dept you have the more your score goes higher. Sounds like a scam that the bank started.

  19. Anonymous says:

    how long does it take for accounts to clear off my report after I have paid them in full?

  20. Kay says:

    I have had two major credit cards for many years and pay them completely off each month. My credit rating remains very high and zeroing out the cards doesn’t seem to make a bit of difference. I have a credit monitoring service and check it frequently.

    • kdean says:

      never pays credit cards to zero each month, because it’s just like not using it! you have to let them carry a balance one month, then pay them off every other month, this will show that you can handle debt and pay on time as well. Unfortunately you have to have debt to establish good credit and increase your credit score. Not having debt will not increase your credit score. Usually you will need at least three revolving accounts, and three installment accounts to get your score high. A mortgage account will definitely increase your score!

      hope this helps!!

      (note: this is just from my experience)

  21. Anonymous says:

    just a question, do medical bills count against your score?

    • EFX Moderator, EM says:

      If the medical office or lender reports your bills to a credit reporting agency, it could be included in your score. You could ask the medical provider about their policy for reporting information to credit files. I hope this helps.

  22. Patty says:

    I just checked my credit score with Trans Union and they gave me a score 124 points higher than you show on your multi-score site. How can this be?

  23. AM I am says:

    My take is that is all a racket in which you get punished if you are really responsible with your money – pay as you go, no borrowing.

    Having said that, I have kept my credit score high by paying off loans early and making payments on time. I use my credit cards only for something I’m going to shell out for anyway, such as fuel, medical copays, etc., and pay the cards off every week.

    I got a much better refi on my house in spite of having a fraudulent collection claim on my report because I have been responsible and explained the situation to the underwriter.

    The racket with collection agencies is that a collection on a credit report is usually a deal killer, so the collection agencies use reporting as a form of extortion with negative information going away in exchange for a few bucks. I don’t believe the credit reporting agencies actually investigate disputed claims, that they believe whatever is reported and the negative information stays. It’s easy cash for a collection agency.

    I was willing to walk from the refi loan if they insisted on me paying the collection agency only $214.00 simply because I’m not going to be ripped off by a series of vermin.

    • AM I Am says:

      I’ve been looking into the fraudulent collection claim which is reflected on my credit report.

      The original claimant is a communications company with which I had a lot of trouble with, such as billing me for usage on an phone number I hadn’t had for a couple of years or so. I could never get anything straight with them unless I threatened legal action. Having had enough, I asked that they terminate my account and send me closing bill, which they chose not to do, but continued to rack up charges. I just quit paying them and they charged off the account. I’d have gladly paid them if they had just terminated the account and sent a closing bill.

      It’s been through a series of junk debt buyers who initially attempted to harass me into buying them off, but I just changed my phone number and otherwise have ignored them.

      The collection claim is past the statute of limitations, so they can’t collect even if they took me to court, which they’re not going to do with the insignificant payoff.

      However, the last Junk Debt Buyer has illegally re-aged the collection claim in an attempt to keep this on my credit report forever, and in the end they may owe me enough money under the Fair Debt Collections Act for me to take them to court.

  24. giovanni says:

    can i get fha loan with 673 credit score

    • EFX Moderator, EM says:

      Great question! Getting a loan depends on a lot of factors in addition to your credit score, so it’s hard to know for sure. Other considerations include your work history and down payment amount. A mortgage broker would be able to discuss your situation in detail. Thanks for posting.

  25. bill says:

    suprised no one pointed out even if you pay your credit card bill in full every month after recieving the statement, in most casees that is not reflected on your credit report, as most card companies report the last statement balance, so unless you pay your balance before your statement cuts it could look like you have high ultization

  26. Ronnie H says:

    How long does it take for credit inqueries to come off your credit report?

    • EFX Moderator, EM says:

      Ronnie, credit inquiries generally stay on your credit report for one year. Remember, when you request your credit report, these inquiries will generally remain on your file for twenty-four months and do not affect your credit score. Read more about how information is reported on your credit report here. Great question, thanks for posting.

  27. Eddie klarfield says:

    Credit is a job in itself takes hard work take it from me used to have really good credit buy whatever I wanted got in trouble then had to work hard to build it back up I sell cars for a living and deal with credit every day. The average person will not know what score they have; they think a 550 is good to get a good rate now the target is 760 a lot of people will tell you they can fix your credit score fast. Remember there is no quick fix u can’t just change the score fast.its over time be patient because this is going to take time. First step is get a copy of your free credit report from annual credit report.com look at it very closely if anything is over 7 years unless its a bankruptcy or a public record or federal student loan that can’t be discharged even with a bankruptcy. # 2 pay your bills. # 3 keep balances low.# 4 only apply for credit when needed. # 5 only 2 inquiries per year.# 6 keep balances low on revolving credit. Over time you should be an 800 credit .hope this helps good luck

    • EFX Moderator, EM says:

      Eddie, these are really great tips. It’s great to hear from someone who works in the lending industry. Thank you so much for sharing.

  28. Eddie klarfield says:

    Credit inquiries stay on credit file for 2 years

  29. Terry T says:

    I was trading my vehicle in for a newer model and told the dealer he could run my credit “one time”. Now I see that not only did he run it, but two other companies he submitted it to ran it, for three instant hits. He recieved and provided me with a copy of my score which earned prime rate however this day instantly dropped my score below prime (down 51 points!). How and why would this drop my score like this? I didn’t do anything stupid, the vehicle is the same I had only 4 years newer. What a headache!

  30. Eddie klarfield says:

    Terry the answer to your question is when u run credit for a car loan they will send it to a few banks to see what’s the best rate.over time it should go up

  31. Dave S. says:

    Remember, Terry, your FICO score is not designed for your benefit. FICO makes its money from large lending institutions. Good “Credit” is a virtue, a good “credit score” is not the same. Not having much recent credit is not a problem–unless you have a lender who lives and dies by your credit score. Your credit score is supposed to be a three digit macro [based on 300 million people statistics] mathmatical predictive tool regarding how likely you are to default on a loan within the next 2-3 years to be used by lenders who don’t look at any of your financial information [e.g. income, net assets, etc.]. You credit score does not measure your ability to pay, the wisdom of your financial habits, or if you are doing well with money.

  32. Anonymous says:

    they provided me with the print out from their inquiry. The dealer should just provide a copy of that inquiry to the lenders?

  33. Anonymous says:

    I’m trying to figure out if I would be better off cancelling the small accounts I have (like store accounts) that are paid off or am I better off to keep them with zero balances?

    • EFX Moderator, EM says:

      That’s a great question, and the answer is different for each situation. Click here to read information on how closing an account can affect your credit score. I hope this helps.

  34. Temy T Spat says:

    I would like to know. I pay my bill on time and also I do not own any body money. Why I have bad credit report? Would you please check it for me. On the Three company EQUIFAX, TRANSUNION,EXPERIAN report it so much differ I don’t understand why? I would like to be clear for me Thankyou


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