As you settle into your life in the United States, you shouldn’t be shocked that credit reports are everything here. That’s why understanding the ins and outs of credit can save your life. In fact, establishing a solid credit history is a must for achieving financial stability and reaching your goals.
But, you may often hear that the world of credit is such a horror, especially when there are so many myths floating around. Hence, we’re here to help. We’re going to bust some common credit myths that every new US citizen should know about.
Leaving a Balance on Your Credit Card Is Good for Your Score
Guess what? It’s actually a myth. Leaving a balance on your card doesn’t help boost your score; in fact, it can do the opposite. Here’s why: when you carry a balance and only make minimum payments, you’re accruing interest charges.
Not only does this cost you more money in the long run, but it also increases your credit utilization ratio – the total amount of available credit you are using. High utilization ratios can negatively impact your score. So, instead of leaving a balance hanging around, aim to pay down your credit card bill in full every month to maintain good financial health and keep that score climbing.
Closing Credit Cards Boosts Your Score
Contrary to some popular Credit Repair Payment Processing Options, closing credit cards can, in fact, have a detrimental, harmful impact on your credit score. It’s because one of …