How to fix a credit score or even how to improve a credit score is a hotly debated concept these days. Especially wit

h the current state of the economy, many people are plagued with bad credit and are looking for ways to get a higher credit score to get better interest rates or even to buy a house.

The thing is, who do you follow or who do you even trust? Afterall, it’s hard to even listen to governments. With some of them looking at going into default, even they seem to have credit issues.

That being said, here are a few notes on common misbeliefs regarding credit and how to improve your credit.

You may have heard some of these things in your time. I bet you may be surprised to see that some of them are just plain bad advice.

Three Myths in Boosting a Credit Score

Credit building is one of the many things in life that can sometimes revolve around myths. People think that there are certain things they do that increases their score even if these things really do not impact their scores in any way. The truth is there are really no easy credit score fixes just like what commercials claim. The simple formula to credit score improvement is having good payment behavior and possessing a healthy mix of credit. Here are some of the wrong beliefs that are not helpful in boosting your credit score.

Image via Wikipedia

Credit Improvement Myth # 1: Choosing to get rid of credit card offers will help

John Ulzeimer, SmartCredit.com’s consumer education president, said that it is a common belief among people that if they choose to get out of credit card offers, the credit inquiries in their reports will be lesser. But, the truth is, these inquiries are “soft” and do not really affect the score. He further adds that people can still welcome the offers but it will not strengthen their credit scores.

Credit Fix Myth # 2: Closing old accounts improves score

Trey Loughran, Equifax’ personal information solutions’ President, says that closing your accounts are not really helpful to a credit score. It can even cause a slight damage by shortening your credit history and leaving you with a minimal amount of remaining credit.

Credit Repair Myth # 3: Opening more accounts helps boost credit score.

Several consumers experiencing problems in their credit think that having many accounts will show that they can manage credit. Actually, this has a reverse effect. According to Experian’s public education director, Rod Griffin, more accounts will make lenders wonder why all those credit are needed. He added that it is even a sign of risk that can make your credit score suffer. What lenders will actually see if you have several accounts is the number of hard inquiries in your report. Those inquiries will decrease your score and lenders will worry that you might be in dire need of financial help because you are gaining access to too much credit.

So, while you are working to get that perfect 800 credit score, just know that there are some things that will help you and some things that are just plain malarky.

Here’s to your credit and financial freedom!

Related articles

• 8 Credit Score Myths Debunked (abcnews.go.com)
• Four Horribly False Credit Score Myths (mint.com)

Incoming search terms:

• improving credit score falicies (1)

Mortgage loans that were obtained between 2005 and 2007 account for almost two-thirds of delinquent balances said Equifax. Although there is a decrease in the number of past due accounts of at least 30 days, those for 60 and 90 days are still continuously increasing.

In 2010, first mortgage loan write offs, installment loans and revolving accounts of home equity totaled to $304.6 billion. According to the analysis of Equifax, the number will keep on rising without any indications on when it will reach its peak. This number is way above the $126.7 billion total of loan write offs in the year 2006 and 2007.

According to the estimates of Equifax, as of May 2011, the total amount of first mortgage in the early stages of foreclosure is at $319.7 billion. This started in the years 2006 and 2007, a not surprising fact since those were the years when subprime lending activity started to rise.

REO properties is a main obstacle to the recovery of the economy, says Equifax. The reason for this is that REO rates stay high while lenders are struggling to get rid of their properties through short sales and auctions.

The completion rate of foreclosure is at 1.45%. This is in the same level as bankruptcies which are at 1.6% at the present time. Equifax says that the same rates indicate that most REO properties are brought about by the bankruptcy proceedings.

Equifax Mortgage Services’ senior vice president and general manager Craig Crabtree says that real estate owned properties and shadow inventory are performing a main role in the current mortgage market and slowing down the road to recovery of the economy.

Even if there are some stabilized lending sectors, there is still a high volume of past due first mortgage loans which has caused a slowing down of the foreclosure process. The mortgage market will keep on impacting the growth of the economy until the foreclosures are processed.

Related articles

• Three roadblocks to a refinancing boom (finance.fortune.cnn.com)
• Consumer bankruptcies on the rise: Equifax (marketwatch.com)