Watching Your Wallet: Myths about your credit score
LANSING, Mich. (WILX) - When it comes to your credit score, there are a lot of misconceptions out there.
About half of all Americans think carrying a small balance on a credit card is better for a credit score than paying off the balance in full each month. This is a myth.
According to Sara Rathner, a personal finance expert with Nerdwallet, that just leads to paying unnecessary interest.
“It shouldn’t cost you money to grow your credit score over time,” Rathner said. “You can do it for free by paying your credit card bills in full, on time, every month.”
Nearly 2 in 5 Americans believe checking their own credit score could cause it to drop -- also not true. Checking your score is important to do and a lot of tools exist to allow you to do it for free.
Half of Americans believe closing an old card you no longer use is good for your credit score. That’s a myth.
“It’s so tempting to declutter your wallet if you don’t want to carry all that extra weight around,” Rathner said. “It can be worth keeping an old credit card open even if you don’t really use it that much.”
And if that old card charges an annual fee, call the issuer and see if there’s a no annual fee card you can transfer your account to. Having a long time credit card -- even one you never use -- does help your credit score.
More: Watching Your Wallet
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