Dispelling Credit Myths - KCBD NewsChannel 11 Lubbock


Dispelling Credit Myths

Even if you don't understand 'Fico', you probably know why your credit score is important. Donald Rehorn from the Consumer Credit Counseling Service talks about credit and personal finance almost everyday. He says creditors use the Fico Score to determine your financial responsibility. "It all comes down to if a creditor thinks he is going to get his money on time."

Rehorn says there are four main myths about credit scores. Myth number one: Closing accounts will help your score. Rehorn says, "When you shut down those accounts, it looks as if you are using more of your available credit." Rehorn says this could make you appear deeper in debt. However, having too many open accounts can hurt your score as well.

Myth number two: Checking your Fico scores can hurt you. Fico realizes when shopping for a mortgage, several lenders will look at your credit score. Those inquiries usually count as one inquiry.

The third myth:Credit counseling hurts your score like a bankruptcy. Rehorn says, "Credit counseling assists people in paying off debt. Most lenders look at this in a very positive way."

Myth number four: Companies promising to repair your credit can help. Rehorn says, "The fact is that you cannot repair or change history. We get a little disturbed when we see companies that say we can do all of this for $400 when in fact you can do it for yourself."

A number of factors determine your Fico score. These factors include late or missed payments on credit cards and household utilities, bankruptcies, foreclosures and balances owned on other lines of credit. For NewsChannel 11's Consumer Connection, I'm Sharon Maines.

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