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Home > Other Services > Member Benefits > Clearing Up Credit Score Myths
Clearing Up Credit Score Myths11/25/2015

Written By: Margarette Burnette, Nerd Wallet

Your credit score can help determine whether you qualify for a loan and whether you get the best loan rates, so it's to your advantage to try to increase your score as much as possible. Fair Isaac Corp., or FICO, the most widely used credit scoring company, uses ratings that generally range from 300 to 850 - higher is better.

But there are some misconceptions about what it takes to increase your score. Let's separate fact from fiction.

Myth #1: My credit score will be higher if I don't open any credit accounts.
About 31% of adults in the U.S. between the ages of 18 and 34 have never applied for a credit card, according to a NerdWallet study on average credit scores. But in order to even have a FICO score, you need one reported credit account, such as a loan or credit card, that's been open at least six months.

Financial institutions such as Members First Credit Union of Florida offer a variety of credit cards and other financing at competitive rates that can help you improve credit. To increase your score, show that you can manage your credit responsibly and make monthly payments on time. Make sure you have a low credit utilization rate, which is the percentage of your available credit that you're using.

Myth #2: A negative mark on my credit will always keep my score low.
Late payments and collection items on your credit report will affect your score. But if you've made mistakes in the past, your rating doesn't have to stay low. The best move is to get current and stay current on your monthly payments. FICO scores put less weight on previous credit issues as time passes, so you can eventually raise your score even if your credit history isn't perfect.

Myth #3: Closing old credit card accounts will raise my score.
It feels good to pay off a credit card. If you have an account with a zero balance, you may be tempted to close it. But this reduces the total amount of credit you have available, which can hurt your credit utilization rate. Closing an older account could also shorten the average age of all your accounts, which is another factor FICO uses in determining your credit score.

A better option may be to keep the credit card account open, even if you have no plans to use it. Make sure you monitor the account regularly for unauthorized charges, however.

In fact, it's a good idea to keep tabs on all your credit accounts by regularly obtaining copies of your credit reports from the three major credit reporting bureaus - TransUnion, Equifax and Experian. You can visit to get a free report from each major bureau every 12 months.

Know the facts when it comes to credit. By opening accounts responsibly, keeping your balances low and showing that you can make payments on time, you can steadily increase your credit score.


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