RICHMOND, Virginia (WWBT) – When it comes to your credit score, there are a lot of misconceptions. That’s why Rachel DePompa shatters credit score myths in this On Your Side savings guide.
About half of all Americans think it’s better to keep a small balance on a credit card to get a credit score than to pay off the entire balance each month. It is a myth.
Sara Rathner, personal finance expert at NerdWallet, says you only pay interest unnecessarily. “It shouldn’t cost you any money to increase your credit score over time. You can do this for free by paying your credit card bills in full, on time, every month. Rathner said.
Another myth that Nerdwallet discovered in a recent poll? Almost 2 in 5 Americans (39%) think checking their own credit score could lower it. Not true! Checking your score is an important thing to do, and there are plenty of tools out there for you to do for free.
Forty-eight percent of Americans think closing an old card that you no longer use is good for your credit score. It is a myth.
“It’s so tempting to declutter your wallet if you don’t want to carry all that extra weight, but it can be worth keeping an old credit card open even if you don’t really use it anymore,” Rathner said.
If that old card charges an annual fee, call the issuer and see if there is a card with no annual fee that you can transfer your account to. Having a long-standing credit card, even one that you never use, helps your credit score.
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