Everywhere you turn, there’s a piece of advice about improving your credit score. It’s easy to have misconceptions about what will positively affect your score. Here, we explore the expectations versus the reality of improving your credit score.
Expectation: My Credit Score Will Improve Overnight
Many people believe that they can take a few specific steps and see immediate improvements in their credit score. They expect a drastic change in a short amount of time, but the reality is starkly different.
Reality: Improving Credit Takes Time
Improving your credit score isn’t an overnight job. It requires patience and consistent effort. Timely payments, reducing debt, and maintaining low credit balance all contribute to your score, but they take time to show results.
Expectation: Closing Credit Cards Boosts Score
A common myth is that closing unused credit cards can improve your credit score. After all, fewer cards mean less potential debt, right?
Reality: Closing Credit Cards Can Hurt Your Score
While it seems counter-intuitive, closing credit cards can lower your credit score because it reduces your overall available credit. This leads to a higher credit utilization rate, which negatively impacts your credit score.
Expectation: Regular Credit Checks Damage Your Score
Many people shy away from regularly checking their credit score, believing it’s harmful.
Reality: Checking Your Score Doesn’t Affect It
When you check your credit score, it’s called a “soft inquiry” and it doesn’t affect your score. What can hurt your credit score are “hard inquiries,” which occur when lenders or loan services check your credit due to an application for credit.
Understanding the realities of credit score improvement will help you avoid common pitfalls and take the rights steps towards a better credit score. Manage your expectations, then manage your credit with wisdom and patience.
