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In case you are one of the Americans whom you have credit cards as well as credit card debt. According to Nerdwallet, Most families have over $16,000 in credit card debt, which reaches up to $747 billion across the nation. You may be confident about how credit works, however, what you may be unaware of is that you can unintentionally hurt your credit card score. Here are five popular credit myths that can make you far from prospering financially.

Myth No. 1: Checking Your Credit Score Counts Against You

The outcomes of running a credit card check depend on your background and the purpose of this operation. Using a new credit application may cause no harm to your score; rather it could raise it by less than five points in case you have a short credit history.

Regular checking of your own score to have an idea about your actual situation is a simple and soft inquiry that won’t affect you at all. In fact, most of the credit card companies offer customers free credit scores. Also, you can easily obtain a credit report by using AnnualCreditReport.com. Bear in mind that a credit report is not similar to the FICO credit score, which is what lenders check when having a look at your application.

Myth No. 2: Carrying a Balance Improves Your Score

Actually, carrying a debt load will not help you to enhance your credit score, and with an average interest rate of 15%. According to CreditsCards.com, credit cards are considered an expensive way to fund purchases and also an easy way to get in over your head. However, Money reports that just 35% of credit card users do not carry debt.

Having a credit card makes it easy for you to grow, and paying it off every month makes you stable and good financially. Although you are asked to pay the minimum balance, it is best to pay the full amount and stay away from accumulating interest that can overburden you in the future.

Myth No. 3: Closing an Account Means You’re Financially Responsible

As a matter of fact, shutting down an account can harm your credit score. On one hand, your FICO score is calculated relying on how much available credit you use. known as your credit utilization ratio. If you want to have a good score, you should always keep your ratio’s rate under 30%. On the other hand, in case you shut down an account and accumulate a larger balance, the ratio of your own could inflate.

In case you don’t pay an annual fee for your card, it is best to keep it as much time as possible. That does not necessarily mean that you have to use it, you can even cut it up if you want to, just don’t do one thing; closing the account.

Myth No. 4: Maxing Out Your Card Isn’t a Problem as Long as You Pay the Balance on Time

Regardless of whether you always pay your balance on schedule, reaching the maximum of your credit card will upsurge your credit utilization ratio to 100 percent, the thing that can bring down your credit score. In spite of the fact that companies permit you to do it, doing so irritates the credit card companies, to the extent that some companies will shut down your account. In case you go over the limit, you may experience some difficulties repaying the debt on schedule.

Myth No. 5: Credit Only Refers to Credit Cards

Actually, owning a credit card helps you build a track record easily, however, people with high scores have different credit cards as well as different types of loans, such as car loans, mortgages, and student loans. Paying off numerous types of debt shows how financially intelligent you are and helps in improving your score. It also demonstrates to lenders that you can deal with the type of credit they offer. In fact, using your credit card reasonably and responsibly enhance your score and makes your financial status bright. In order to get on the right way, you should accept the reality and forget about damaging credit myths

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