My name is Rich Little and I'm the Business Manager at Frank Myers Auto Maxx in Winston-Salem, NC. Over the years, I've been hailed as a “credit miracle worker” by many and as “too good to be legal” by others. So...what kinds of kinds of credit problems have I dealt with in my storied career? Bankruptcy, medical bills, charge offs, late payments, divorces, student loan problems, IRS demands, repossessions, and more.
And even though I've literally helped thousands drive home in the car of their dreams, it's about more than that to me. It's also about helping folks rebuild their credit and rebuild their lives.
But there is a lot of false information about credit and credit reports and what does and does not lead to the necessity of credit repair and restoration.
So please allow me to share wth you some common myths and misconceptions.
- Paying cash for everything will help your credit rating.Using cash for all your transactions does not have an effect on your credit (other than you are not using loans, lines of credit or credit cards).
- Paying off collections, tax liens and late payments will remove them from your credit report. Resolving these items is no guarantee they will be removed from your report. You must continue to monitor the situation until the items are truly removed.
- All of your credit reports and credit scores will be the same.It’s not unusual for reports to differ from credit bureau to bureau. Plus, major banks and creditors often have their own method of determining your credit score.
- If you have poor credit, your credit scores will suffer for seven years.The seven year “rule” pertains to a certain type of bankruptcy, not credit issues. Credit issues can be resolved quickly, sometimes in a matter of days or weeks.
- Making a lot of money will improve your credit report and scores.Income is not a big factor in your credit rating. More important is how you spend your money in terms of using credit to do so.
- Divorce will absolve you of your credit responsibilities.The effect on your credit depends on your divorce decree, settlement and your history of sharing credit accounts with your spouse. The Equal Credit Opportunity Act states that married couples have the right to request separate credit reports and histories, even for joint accounts. And, if an account is listed under only one spouse’s name, the other spouse has the right to rely on that credit history.
- Closing credit card accounts will improve your credit scores. A closed credit card account is considered “static” information (not being used) and has little effect on your credit.
- The proper and responsible use of check cards can help your credit reports and scores.Most check cards do not have an impact on your credit status.
Next time, I'll tell you the differences between the three credit bureaus and how your credit score is determined.
