Myths About Your Credit Reports…Part 2

This is a continuance of Tuesday’s mythbuster piece…part 1.  Today we’ll finish the series of credit report myths, with the promise that there will certainly be more to come.

Myth #1 – As soon as I pay a collection off it will be removed from my credit report.  A collection is a very serious derogatory can stay on a credit report for 7 years from the date you went terminally delinquent.  Just because you pay off the collection does not mean the collection agency is going to remove it.  If collection agencies removed the derogatory remarks from credit reports too easily, a collection would not have the same fear-inspiring affect that it currently has.

Myth #2 – Once I pay off a credit card and close the account the credit card will no longer show on my credit report.  A credit card that has no derogatory information could possibly stay on your credit report for years as there is no statute of limitations on good credit.  However, if you have derogatory remarks on this account, then the statute of limitations is 7 years.

Myth #3 – Every time I pull my credit report a score is generated.  This is not true.  If you have not pulled a credit report through a credit monitoring system that provides your scores and you have not asked for (or paid) for your scores, a credit score will not be generated.  Your credit report and your credit scores are two totally different items that are merged together as one, but only when a report with a credit score is requested.  It’s not automatic.

Myth # 4 – My ex-husband or ex-wife can’t hurt my credit score now that we are divorced and the judge has divided all the financial obligations in the divorce decree.  Absolutely false, even though the judge has divided up the debts, you will still be held responsible if that debt goes unpaid if your name remains on the credit card (or whatever the financial obligation is).

John Ulzheimer is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, and a Contributor for the National Foundation for Credit Counseling.  He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry.

Categorised in: Credit Report, Credit Score

This post was written by John Ulzheimer