How Credit Works
Below is a MRR and PLR article in category Finance -> subcategory Credit.
Understanding How Credit Works
To effectively manage and access credit, it's crucial to comprehend how credit scores are developed and monitored by the three major credit bureaus: TransUnion, Equifax, and Experian.
Dispelling Common Credit Myths
Inquiry Myths
One prevalent belief, often referred to as "The Larry Rule," suggests that frequently applying for credit may raise suspicion with credit agencies. However, there are exceptions to this rule:
1. Multiple Inquiries Count as One: If you're shopping for a home loan or similar, multiple inquiries for the same purpose are treated as one.
2. Checking Your Own Score: Reviewing your own credit report does not affect your score.
3. Time Limits: Inquiry data is stored for only six months, allowing your credit score to recover over time.
Contrary to what some believe, most entities can access your credit report without your explicit permission?"except employers.
Credit Repair Myths
Paying off debts immediately does not automatically improve your credit score. While settling a debt is better than leaving it unpaid, past delinquencies may still impact your report.
- Seven-Year Rule: Negative information generally falls off after seven years, but Chapter 7 bankruptcy is recorded for 10 years, and unpaid judgments can remain indefinitely.
- Closing Credit Cards: Many think closing credit cards boosts your score. In reality, open and active accounts, with unused credit, benefit your score more.
Credit Counseling Myths
Credit counseling services have faced criticism, often deservedly so. However, it's a misconception that such services can simply "fix" your credit. Look for reputable services that aim to both reduce debt and improve credit scores, rather than just lowering liabilities.
Finding Help
When seeking credit counseling, choose firms with a proven track record of helping clients manage debt and maintain credit scores.
By understanding these myths and truths, you can make more informed decisions about managing and improving your credit.
Best regards,
James
[Visit CC-YES](http://www.CC-YES.com)
You can find the original non-AI version of this article here: How Credit Works.
You can browse and read all the articles for free. If you want to use them and get PLR and MRR rights, you need to buy the pack. Learn more about this pack of over 100 000 MRR and PLR articles.