Credit Myths Las Cruces needs to know about

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Real Estate

Building good credit is a key element in preparing to buy a home. But there are a lot of misconceptions out there around credit scores, how they work, and how to build and maintain a good one—misconceptions that could actually hurt your credit and make it harder to buy a home.

So what, exactly, are those misconceptions? A recent article from outlined some of the most common myths around building credit, including:

Myth #1: You should close your credit cards once you pay them off. While it might seem like a good idea to close a credit card once the balance is paid off (that way, you won’t accrue a new balance), it can actually hurt your credit—since closing a credit card can shorten your credit history, which makes up about 15 percent of your total credit score.

Myth #2: An occasional late or missed payment won’t hurt your credit score. Think paying late or missing a payment every once in a while isn’t a big deal? Think again. Your payment history accounts for a whopping 35 percent of your credit score—which means that making your payments on time is an absolute must to build and maintain good credit.

Myth #3: Getting a credit report lowers your credit score. In order to build and maintain credit, you need to know what’s going on in your credit report. But many people believe that requesting a credit report will ding their score, preventing them from accessing the information they need. However, this isn’t true; getting a credit report from one of the primary reporting agencies is considered a soft inquiry—and won’t impact your credit at all.

The Takeaway:

So, what does this mean for you? Understanding the common myths around credit will help you avoid making mistakes while building your credit—which can put you in a better position to successfully purchase a home.

Give us a call if you have any questions about understanding your credit and purchasing a home in Las Cruces.