There are a few misconceptions about credit that stop you from reaching goals. Here are a few common ones:

1) Credit Cards are Bad
When paid on time, with preferably more than the minimum due, an open credit card that you take care of shows creditors you’re responsible. It’s only irresponsibility, such as late payments, settlements, are being assigned to collections that look bad.

2) Having a Balance on Your Credit Is Good
However, keep a balance on your card to keep it active for the sake of it is still considered debt and will be reported on your credit as such. Pay off as much of your balance as possible to show your credit possibilities and not carry a debt.

3) Reaching Your Max Limit Is Fine
Maxing out your credit card, even with the intent to being paying it quickly after or to work on paying it off gradually, suggests to creditors you’re a risk and you abuse credit limits often. The limit isn’t meant to be a loan you take out all at once, it’s meant to give you a guide on where your current credit can go. Taking it all at once will only hurt your credit score and chance for a loan in the meanwhile.

Want to learn more about credit, especially regarding your own report and score, call Fix Your Credit Consulting