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Three common myths about credit score

April 3, 2013 by · Leave a Comment 

Myth: Bankruptcy ruins all your credit for ever

It is true that bankruptcy stays in your credit history for several years. But don’t let that prevent you from rebuilding your credit again. After a bankruptcy, start to pay your bills on time. It will start to rebuild your credit again.

Myth: All accounts in collection should be paid in full immediately to improve credit score

Paying off an account in collection in certain instances may lower your score. If you have an account in collection and you are trying to buy a home, wait till you close escrow to pay the account in collection. In order to improve your credit score in the long run, all accounts in collection must be paid off as soon as possible.

Myth: When you shop for a mortgage, all inquiries into your credit will count as separate hits

Multiple inquiries into credit could impact negatively lowering your credit score. But when it comes to inquiries related to a mortgage, FICO disregard mortgage related inquiries 30 days immediately prior to calculating the score. Additionally, mortgage related inquiries within a 45 day period will be counted as a single inquiry by credit agencies.

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