If you are like most people, you might be overwhelmed by the world of personal finance, credit cards, and credit scores. Between tracking credit card percentage rates to keeping an eye on stocks, insurance options, and savings accounts, it can be hard to stay on top of your financial health – let alone determine fact from fiction, when it comes to what will help increase your credit score. Below are a few common misconceptions when it comes to boosting your credit score.
It’s good to carry a balance on your credit card.
According to financial experts, carrying a balance does not improve your credit score. Yet, two in five Americans believe that this common misconception is true, falsely thinking that carrying a balance while making timely payments indicates financial responsibility. In reality, carrying a balance will force you to pay interest for no good reason. If you’d like to continue using your credit card while building your score, feel free to use your card lightly but regularly, and always pay off your balance in a timely manner.
Checking your credit score hurts your credit report.
Have you ever noticed a remark on your credit score after applying for a credit card or other major credit decision? That’s normal, and to be expected. However, what won’t result in a remark on your credit report is simply checking your score. As it turns out, checking in on your credit standing is what’s known as a soft pull, or a check that won’t hurt your credit or remain on your report. So, go ahead and check your score regularly. Doing so is a great way to understand your financial health and strategize ways to improve it.
You should aim for a credit score of 600.
Contrary to popular opinion, 600 is not an ideal credit score – in fact, it’s far from it. Because credit scores range from 300 to 850, 600 is considered a below-average score, and won’t make it easy for the credit holder to open credit cards or access other lines of credit. Even if you are able to open a line of credit with a score in the 600s, you can likely expect to pay higher annual percentage rates. Instead of aspiring for a credit score of 600, increase your goal to 700, which is the point where you’ll begin to unlock top-tier financial products and percentage rates.
As the saying goes, knowledge is power – and, at Marketplace Vista in Marietta, Georgia, we couldn’t agree more! We hope that this blog has presented you with the valuable information that you were seeking out.