Fact act Nevada

Related topics: credit score, credit reports, financial planning, loans, Liz Weston A decade has passed since the vault cracked open and fact act Nevada we started learning how credit scores really work. For years, the creators of the leading credit scoring formula, the FICO, didn't want consumers to know the scores existed, let alone what went into them.

In early 2000, however, E-Loan started letting customers see their FICO scores. That free experiment was fact act Nevada quickly shut down, but the secret was out. Pressure from consumer advocates and lawmakers finally persuaded fact act Nevada the FICO creators -- a company named Fair Isaac, now known as FICO -- to reveal later that year the 22 factors, grouped into five categories, that went into creating its scores. But 10 years later I'm still hearing many of the stupid myths fact act Nevada about credit and credit scoring that prevailed 10 years ago, plus some that have sprung up since. Their prevalence is keeping people from understanding one of the most important numbers in their financial lives. Credit scores are used: Failing to understand credit scores and how fact act Nevada they work, in other words, really can put a dent in your fact act Nevada financial life. get my free credit report Here are the seven most dangerous myths that need to be dispelled: Myth No 1: "If you handle your fact act Nevada finances responsibly, your credit scores will fact act Nevada take care of themselves." Fact: A credit score is not a financial-health score.

It doesn't measure your income, assets or financial savvy. There are some behaviors that may be good for your wallet that aren't good for your scores. Keep in mind fact act Nevada that credit scoring formulas have one primary purpose: to help lenders gauge the likelihood you'll default, based on how you handle credit. If you stop using credit fact act Nevada or use it in a fact act Nevada way the formulas don't like -- using only one card, shutting fact act Nevada down a bunch of accounts or maxing out your cards, even fact act Nevada if you then pay them off in full -- your scores fact act Nevada could suffer. credit reporting laws 2: "Checking your credit hurts your credit scores." Fact: Checking your own credit reports and scores does not affect your scores. A credit check fact act Nevada could hurt you if you asked a friend at a bank or car dealership to pull your credit reports. Such transactions probably would be coded as "hard" inquiries, fact act Nevada or as applications for credit, which fact act Nevada could ding your scores. But checking your own credit is otherwise a non-event. This persistent myth is particularly destructive, because it discourages people from knowing what's going on with their credit reports and fact act Nevada scores. Many reports contain serious errors that result in your being fact act Nevada turned down for a loan fact act Nevada or paying a much higher interest fact act Nevada rate than you deserve.

You need to visit AnnualCreditReport.com at least once a year to view your free credit reports from the three bureaus and dispute any fact act Nevada serious errors. If you'll be in the market for a major loan, such as a mortgage or an auto loan, you'd be smart to buy your FICO scores from myFICO.com to see how lenders are likely to view your application and get tips from improving your numbers. secure free credit report

3: "Asking for lower limits will help your credit." Fact: Having sizable credit limits is a good thing for your scores, fact act Nevada as long as you don't use them to run up debt.