So you think you know the facts about credit reports?

Credit Report Fact or Fiction?

Fact or Fiction? – I have a bankruptcy or foreclosure on my credit report. No one will ever lend me money or extend credit to me, again. Not true. While each of these items is damaging to your credit report, the negative effects of these and other items lightens up over time. A bankruptcy can only stay on your credit for between 7 to 10 years, depending on which chapter you file. A foreclosure can only stay on your credit report for 7 years from the date of first delinquency. If you have a foreclosure in your credit report you should wait 3 years to apply for a home loan again or if you had a bankruptcy you should wait at least 2 years to apply for a home loan again.

Fact or Fiction? – Paying the minimum payment in my credit cards will help my credit score. Only if your credit card balance is between 20% to 30% of the credit limit. If the credit card is max out your credit score may be affected by 30%.

Fact or Fiction? – Closing credit cards will raise my score. Fiction. FICO score considers not only available credit but credit utilization. That is, what percentage of your credit you use. By closing credit card accounts, your utilization may go higher and thus, lower your score.

Fact or Fiction? – When you get married, you get a joint credit report. NOPE. We come into this world as individuals and enter the credit world the same way.

Fact or Fiction? – The divorce decree will remove the accounts from my credit report. The divorce decree is the order the judges gives to assigns each person their financial responsibilities. This document will not remove the accounts from the credit report unless the account is refinance under the name of the person who is now responsible for the account. If the accounts were joint and payments are not made on time it will affect both credit report.