Having bad credit can cause a number of problems. Whether it being denied loans services or high fees and interest, having bad credit can have many consequences now and in the future.
Dealing with bad credit alone is bad enough but the amount of misinformation about credit is huge and can make improving your credit that much harder. Read on for 4 bad credit myths that may be causing confusion for you.
Multiple credit inquires can damage your score
It is important to monitor your credit score and doing so won’t damage your score. The only rule, pull your report from each credit bureau only once a year. If you are denied a job because of your credit, it is free to check your scores.
It is true that multiple inquiries from lenders can damage your score. This is temporary but if these inquires take place within a short period of time – a week or two, all inquiries will count as one, but hurting your score.
Using a credit repair agency to improve your credit score is a good idea
There are a lot of companies out there that claim they can fix your score by striking negative items. This is not possible. Unless the items are outdated or incorrect, there is no way to remove them. Any true mistakes on your report that a credit agency can fix, can also be found and disputed by yourself, for free.
Once a debt is paid, it will be removed from your report
Paying off debts is a great step to building your credit score back up but even paid debts can hurt your credit. Lenders report negative information such as late payments and bankruptcies to credit bureaus for 7 and 10 years respectively.
Your can ask your lender to stop reporting on a paid account, but they don’t have to say yes.
You can’t get a loan with bad credit
Having good credit is definitely a benefit when apply for a loan. You will have much better lending options and rates with good credit. But having bad credit doesn’t make it impossible to get a loan, harder, but not impossible.
Try applying for a loan before car shopping. Using an online lender is often a great choice for bad credit shoppers. A large down payment can also help and give you a little more room to negotiate.