In some recently published advice, consumers are being encouraged to stay back from bad money advice thanks to some useful tips to bust the seven most common consumer credit myths.
When it comes to credit scores and finances, myths can cause some huge problems. It is increasingly common for consumers to be faced with plummeting credit scores because they believed in some incorrect advice.
This can result in the consumer being unable to qualify for preferential rates when they apply for mortgages, credit cards or vehicle financing. The following seven myths are believed to be the most common misconceptions which can cause a downwards credit spiral.
- My credit will be good as long as I make my minimum payments on time. In reality, even if you are making payments on time, those larger outstanding balances can drag your credit score down.
- Once I pay off a debt it will be taken off of my credit report. Again this is not true, while the debt will be reported as a closed or paid account, it still leaves a negative mark in your credit history.
- Errors involving amounts owed or paid off are the only ones which ill affect my credit score. The truth is that any type of financial discrepancy however basic can have some bearing on your credit score.
- I can save money with zero percent deals. These sound good in theory, but unless you are highly organized and ensure that your balance is paid in full before the end of the zero percent offer, then you may be hit with unwelcome charges.
- Only strangers will steal my identity. The sad truth is that many identity theft cases actually involve a friend or relative who has easy access to your personal details.
- Online banking and shopping is not secure. This can depend on the bank itself and the retailers. Most will have very extensive security protection in place.
- A debit card is as safe to use as my credit card. Unfortunately this is not the case. Debit cards are not extended the same levels of fraud protection and liability insurance that credit cards are.
These are the most common credit myths which consumers put their faith in on a regular basis. However, by doing so they could be burdening themselves with a questionable credit history.
When it comes to advice about credit and finances it is always best to ask the experts rather than just go with what you hear from friends and co-workers.