Credit Myth Busters
sometimes falsely considered ‘free money’
a credit card
a history of this is necessary to show lenders that you can manage your money responsibly
making on time payments
this number is a primary factor in determining your credit tier, a three digit number found on your credit report that represents your payment history & overall credit usage
my credit score
do not open more of these than you can manage
credit cards
this common misconception about bad debt is false
the myth that bad debt lasts forever
true or false: applying for credit & pulling my credit report often is the best way to keep an eye on my credit score
false
this credit score range is widely accepted as 'good credit'
670-739
a situation in which you can avoid paying interest on your credit card
paying the statement balance in full
this type of card is often mistakenly believed to directly improve your credit score by spending the balance in your checking account
a debit card
these can remain on your credit report for up to seven years, significantly affecting your credit score
collections
credit cards come with this type of interest rate, a rate that can change
a variable interest rate
avoiding these charges, is an essential part of responsible credit card management
late fees and/or over-limit fees
credit karma provides an estimate of this number based on the information in your credit report, helping you understand what a lender might see
my credit score
having a diverse credit mix that includes these types of loans can improve my credit score
installment loans & credit cards
a matrix used for determining interest rates when lending money to customers
dedicating extra funds to this instead of making the minimum payments
paying off debt
this credit score is considered a blank slate, not a poor or negative credit score
zero
a tactic used to stop direct & easy access to your credit, also considered a way to protect your credit report
freezing your credit
the way in which a higher credit score/credit tier can effect your interest rate & monthly payment
more money in your pocket
to avoid negative impact on your credit score, most experts recommend keeping your credit utilization below this percentage
'ideally' 30%, not more than 50%