Here are the Top 5 Credit Score Myths and Facts:

1. Approaching your credit card limit will negatively impact your credit score.
   FALSE:  If you pay off your credit cards every month, even if you are almost at your limit every month, this will not drop your credit score.  It may on the other hand prompt the lender to raise your limit.  Credit utilization ratios measure revolving credit – so if you are carrying balances on month over month (like on a credit line) this will drop your credit score.
2. You can’t dispute items on your credit report.
   FALSE:  You totally can dispute items on your credit report by contacting Equifax, TransUnion or Experian.  It is up to you to ensure your credit report is correct and to rectify any inaccurate, incomplete or fraudulent credit that may impact your credit worthiness with potential future lenders.
3. Checking your credit score once a year will not drop your score.
   TRUE:  It’s a good habit to check your credit every year to understand your credit score before applying for a major purchase or loan.  If there is something suspect – you can address it and fix it before you go to your lender.
4. Parking Tickets are not included on your credit report.
   TRUE
5. Having a good credit score means you will automatically be approved.
   FALSE:  There are a lot of other factors when mitigating a credit application and having a good credit rating is just one of them.  Income, debt ratios, and other open credit, TDS/GDS, assets and liabilities are all considered when applying for credit – especially something big, like a mortgage.

Christine’s Tip:

Carrying large credit card balances month over month stunts your future growth.  Let me tell you why.  When you have a lot of debt and you are continually thinking about it, trying to hide it from your partner, or scheming to find ways to make a dent in it; you can’t do anything else.  Mentally, the shame of carrying your debt and not being able manage it makes you vulnerable to stress, depression and personal harm.  Only when you release yourself from this mental burden, will you ever be able to be your best self.  Creativity, entrepreneurship, advancement in your career, relationships with family and friends, care for your children – all will be tainted by your continuous efforts to try to manage your overwhelming debt.

I’m a great advocate for planning, for without a plan, how can we expect to have a future.  Remember, taking control of your current debt is all part of planning.