TrueCredit.com
Seven Common Consumer Credit Myths Dispelled By TransUnion’s TrueCredit.com
With the economy reeling and home loan
rates at a nine-month high, lenders are scrutinizing individuals’ credit histories like never before. According to Trend Data from TransUnion,mortgage loan delinquency (ratio of borrowers 60 or more days past due) reached a national average high of 3.23 percent for the first three months of 2008. Many consumers don’t realize the impact of late payments on their credit score and thus, their finances. A consumer’s capacity to effectively manage credit can be hindered by common misconceptions. To assist consumers,
TransUnion’s TrueCredit.com addresses seven credit myths that may inhibit consumers from truly understanding how credit relates to their bottom line.
“Being knowledgeable about your credit standing is becoming increasingly more important by the day,” says Lucy Duni, vice president of TransUnion’s
TrueCredit.com. “Businesses, ranging from insurance companies to wireless
providers and some employers, are now reviewing consumer credit information as
a routine part of their application processes.”
When it comes to credit, knowing fact from fiction and understanding how
to act is critical. Following are common credit myths that may be preventing
consumers from engaging in effective credit management.
Myth: My score will drop if I check my credit.
Fact: Checking your own reports and scores is considered a “soft inquiry”
and has no negative impact on your credit score.
Myth: Reviewing any one of my three credit reports occasionally will tell
me everything I need to know about my credit standing.
Fact: Actually, occasional monitoring will give an incomplete snapshot of
your credit standing. You should, instead, check all three of your credit
reports and scores frequently throughout the year because the information and
scores contained in each of those reports can vary at any given point in time.
TrueCredit.com offers 3-Bureau Credit Monitoring, providing access to your
information when you want and even alerts you when something critical has
changed.
Myth: There’s only one score that all lenders use to determine my
credit-worthiness.
Fact: There are literally hundreds of different scoring models used by
lenders in the marketplace today. To see where you stand from a lender’s
perspective, scores can be purchased online, but it’s important to select a
service that provides summaries that are easy to understand.
Myth: Closing old credit card accounts will clean up your credit reports.
Fact: Some people advocate closing old and inactive accounts as a way to
manage their credit. In most cases, closing your older accounts will make your
credit history appear shorter, which can negatively impact your overall credit
standing.
Myth: Once you pay off a delinquent loan or credit card balance, the item
is removed from your credit report.
Fact: Negative information such as late payments, collection accounts and
bankruptcies will remain on your credit reports for up to seven years. Certain
types of bankruptcies stick around for up to 10 years. Paying off the
delinquent account won’t remove it from your credit report, but it will update
the account to indicate it as “paid.”
Myth: If I don’t pay a medical bill on time because I believe it is
incorrect, I can’t be held accountable.
Fact: If you fail to pay a medical bill in a timely manner, the delinquent
payment may be reported as late to a credit bureau. If you believe a medical
bill you have received is wrong or was sent to you in error, it’s best to
contact the provider to resolve or discuss the matter prior to the bill
becoming past due.
Myth: The “credit bureaus” report people as having either good or bad
credit.
Fact: Credit reporting companies compile information that is provided
directly and voluntarily by consumer lenders. If you have a credit card, home
or auto loan, or make other monthly payments, details of your payment track
record on these are likely being reported by those parties.
For more details about credit myths, visit TrueCredit.com
About TrueCredit.com
Since 1999, TransUnion’s TrueCredit.com has helped millions of consumers
manage their own credit health. Through a suite of educational materials, free
monthly newsletters and easy-to-use products, the company helps consumers
understand personal credit management and empowers them to achieve greater
financial well-being. TrueCredit.com’s online products include credit
reports, credit and insurance scores, credit monitoring, debt management tools
and identity theft insurance services. TrueCredit.com is the direct-to-
consumer arm of Chicago-based TransUnion Interactive, a subsidiary of
TransUnion, a global leader in credit and information management. Manage your
credit. Manage your life(SM). http://www.truecredit.com
TransUnion’s Trend Data database
The source of the underlying data used for this analysis is TransUnion’s
Trend Data, a one-of-a-kind database consisting of 27 million anonymous
consumer records randomly sampled every quarter from TransUnion’s national
consumer credit database. Each record contains more than 200 credit variables
that illustrate consumer credit usage and performance. Since 1992, TransUnion
has been aggregating this information at the county, Metropolitan Statistical
Area (MSA), state and national levels.
SOURCE TrueCredit.com
Steven Katz of TrueCredit.com, +1-312-985-2373, skatz@transunion.com, or Aimee
Eichelberger, +1-312-568-7324, aeichelberger@c-k.com, for TrueCredit.com