No. 6: Medical debt is treated differently on credit reports
Credit bureaus do not discriminate when it comes to medical payments. Typically, medical bills are not reported to a bureau unless the bills are sent to a collection agency. When that happens, "medical collections are the same as any other collections," Detweiler says. "They are a serious negative. The more recent they are, the more it affects your score."
No. 7: A credit repair company can only remove inaccuracies to improve my score
While it's true credit repair companies help you get inaccurate information corrected on your credit report, they can sometimes go one step further. "The real core competency of a credit repair company is to get stuff that's negative removed from your credit report – whether it's accurate or inaccurate," Ulzheimer says.
No. 8: So that means a credit repair company takes illegal action to fix my score
No, what they do is perfectly legal as long as they follow a federal statute called the Credit Repair Organizations Act. Every state has its own version of CROA. "It is a law filled with teeth," Ulzheimer says. For one, companies must disclose that they're going to take actions you could technically do yourself (at no cost), and they can't charge you until after the services have been rendered. They also can't guarantee anything, Ulzheimer says. "If they say, 'I can have that bankruptcy deleted, guaranteed,' that's a violation of the Credit Repair Organizations Act."
No. 9: My utilization rate doesn't matter
Utilization is an important measurement in the credit scoring system. "It can wildly change your score in a short period of time in either direction," Ulzheimer says. He explains it as the percentage of the credit cards you're using at any given time. To calculate your utilization percentage, divide your credit card balances by your total credit card limits and multiply by 100. "The higher that percentage, the fewer points you're going to earn in that particular category, depending on the scoring system," Ulzheimer says. "The lower the percentage, the better it will be for your score." The credit score tracking website CreditKarma.com recommends that consumers shouldn't exceed 30 percent.
No. 10: I should avoid new store credit cards because they'll hurt my score
You've likely been asked at checkout: "Would you like to open a store credit card and receive 20 percent off your purchase today?" For some consumers, it's a good idea to say yes. "That's a great way for many people who might not qualify for other kinds of cards to get a credit card," Sweet says. A store credit card can help raise your credit limit, improve your utilization rate and boost your overall score. Of course, you shouldn't sign up if you'll be tempted to use the card every day, Sweet says, "but don't just automatically assume it's a bad thing before you open that account."
More from U.S. News & World Report:
VIDEO ON MSN MONEY
Yeah... we actually DO get it. The credit reporting system in this country is a total fraud. It's a con job of major proportions designed to squeeze every last ounce of cash and dignity from anyone who's willing to play the game.
Check your credit - it negatively affects your score. Don't check your credit - it negatively affects your score. Apply for credit - it negatively affects your score. Don't apply for credit - it negatively affects your score. Don't pay your bills on time - it negatively affects your score. DO pay your bills on time - it negatively affects your score.
So many of us who PLAY BY THE RULES have Still had our scores ruined regardless of that fact.
So Yes, we DO get it - the whole system is a scam. So stop insulting our intelligence and printing fantasy .. and DO start pretending there are some actual journalists out there who will stop dancing to their tune and start printing the truth.
. 2nd. We had not purchased any items on a "revolving" credit account in over five years. Never mind that we haven't missed a payment of any kind in all of those years, but we need to buy a "washer or something" to prove that we would pay those types of accounts off too...
Who thinks up this crap? WE want a house in the country, and by God we are going to get it. And I don't want to hear about "creative financing" or any other nonsense. We deserve a loan today. We have done everything WE wanted to do, and it fit's within the arbitrary rule system the rich have established.
So, we sold one of our businesses, sold our home without the "help" of a realtor, and are going to pay cash. The bank loses, and we are now looking at living in a home with "no encumbrance" stamped on the deed!!
There is no misunderstanding, Wages for the Working POOR and fading Middle-Class have been Stagnant and or in massive Decline by Design so that more Folks have to rely on going deep into DEBT to survive.
Meanwhile, the Wage Gap has moved from 40 to 1 to well over 400 to 1 and the SuperRich have Record Wealth beyond their Wildest Dream. All because We the People don't have the STONES to do anything about it.
I will pay off my own credit card debt.
I don't like to make promises I can't keep
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