What do Bigfoot and credit reports have in common? They’re each the subject of many myths.
We don’t know much about 8-foot furry creatures, but we can dispel some of the folklore about credit and credit reports. Neile Simon is here to help us do that today.
Neile Simon is a Certified Credit Counselor with Christian Credit Counselors (CCC), an underwriter of Faith & Finance.
If you've ever wondered whether closing a credit card boosts your score or if credit counseling hurts your credit, you're not alone. Let's dive into these common misconceptions and separate fact from fiction.
Myth #1: Paying Off Debt Instantly Improves Your Credit Score
It’s a common belief that paying down debt will immediately result in a perfect credit score. However, credit improvement takes time because credit scores are based on your payment history.
Reality: Your credit report gives lenders a snapshot of how responsibly you've managed debt over time. Consistently paying bills on time is the best way to build and maintain a strong score—but it won’t happen overnight.
Tip: Be cautious of anyone claiming they can “fix” your credit instantly. No legitimate company can erase negative (but accurate) information from your credit history overnight.
Myth #2: Credit Counseling Destroys Your Credit Score
Many people worry that seeking credit counseling will harm their credit score.
Reality: Enrolling in a credit counseling program is a neutral mark on your credit report and does not directly affect your score. Closing accounts impacts your score, so working with an accredited nonprofit organization is essential to develop a plan that keeps your credit intact. That’s why Christian Credit Counselors is the only organization we recommend for credit counseling and debt management.
Tip: Avoid paying for expensive credit monitoring or identity protection services. You can monitor your credit for free through reputable sources.
Myth #3: Canceling Credit Cards Boosts Your Score
Many people believe that closing old or unused credit cards is a responsible move, but it can actually hurt their credit scores.
Reality: Lenders want to see two or three active credit lines. Closing credit cards reduces your available credit, which can negatively impact yo