ATLANTA – Good information is the best way to make informed financial decisions. But the info has to be accurate to help.
NerdWallet, a site that offers advice and tools to help you wade through financial choices, clears up three finance myths.
FINANCE MYTH #1
Millennials and Gen Z check their credit scores a lot, but they are under the wrong impression that this gives them their full credit picture. The fact is that they don’t quite grasp yet everything that goes into making up the credit score. They need more borrowing experience. Here’s a fact: Download your full credit report annually to make sure it’s accurate. That’s the info that goes into the score.
FINANCE MYTH #2
Thirty percent of Americans think just checking your score dings your credit score. Not true Sara Rathner of Nerdwallet told the Fox 5 I-Team. In fact, check it a lot. Often, if you can. She explained what she thinks is confusing people.
“When a lender evaluates a loan application, they do perform what’s called a hard credit inquiry, and that’s investigating your situation. And, that could drop your credit score by a couple of points temporarily. But, if you, yourself, check your credit score, you’re not going to change your credit score at all.”
FINANCE MYTH #3
Often Americans will leave a little balance on a credit card to carry over each month thinking that would help build credit. That is a myth, according to Ms. Rathner.
“Nearly half of Americans believe that it’s good for your credit score to keep a small balance on your credit card from month to month. You don’t have to do this. Why pay a penny of interest if you don’t have to? You can build your credit score by paying in full and it won’t cost you any extra.”
Three finance myths busted.