Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Fair Isaac Corporation (FICO), Equifax Inc. (EFX), Three Perpetual Myths for How to Improve Credit Scores

The world of personal finance, debt and credit scores can be a scary and confusing place. While there’s a lot of helpful information about there to be found, there are also piles of misinformation as well. To help you navigate through the personal finance trenches, let’s take a look at three big myths for how to improve your Fair Isaac Corporation (NYSE:FICO) score, as well as some solid steps that will actually help you improve your score.

Myth 1: Cancel Credit Card Offers
Although cancelling credit card offers may de-clutter your kitchen table, there’s no evidence it’ll improve your credit score. Credit card offers are considered “soft” inquiries, which don’t have an impact on your score . Along the same lines, if you’re worried that a checking your own credit score will lower it, don’t be! Checking your credit score is also a soft inquiry and won’t hurt your FICO score. The path to perfect credit is attainable, you just won’t get there faster by cancelling offers.

Myth 2: Close Out Old Accounts
Sorry folks, closing those old paid-in-full accounts won’t boost your score — and it could actually hurt it . Credit reporting agencies like Equifax Inc. (NYSE:EFX) Experian, and TransUnion want to see long credit histories that are in good standing. When you close an account you, theoretically, shorten your credit history.

Fair Isaac Corporation (NYSE:FICO)Creditors want to see that you’ve had a long history of responsible and diversified borrowing. When you have more credit available, and don’t use it, your credit utilization rate stays low and can help increase your score. Keep in mind that some accounts will stay on your history even after they’re closed. So if you’re hoping to get rid of previously delinquent accounts but paying them off and canceling the account, it won’t work.

Myth 3: Buy Better Credit
Although many companies out there promise they can improve your credit score if you pay them money, it’s simply not true. If you’ve missed payments, you can’t pay to make those records go away.

What can be done is to dispute legitimate discrepancies on your credit report.  But be careful about hiring a company to do this. Some will send a lot of letters to credit agencies about your account, but won’t actually find out what should be disputed and what shouldn’t be. You’ll end up spending money and won’t have fixed anything.

How to really improve a credit score
One of the first steps to improving your credit is to be proactive. Find out what your score is and make sure the accounts and payment history are correct. With so much information flowing into the credit agencies, finding a problem on your account isn’t unusual. You can get a free annual credit report by going here:

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.