Have you ever gotten a tip that seemed helpful at the time, but turned out to be anything but? No big deal if it’s a movie or restaurant choice— but bad information can have a major impact when it comes to your finances. And if that bogus advice is about your credit score— it could cost you both money and unneeded stress. Financial planner and teacher Rob West has credit score advice to avoid.
Most folks know that a low credit score can prevent you from getting a loan. But maybe few realize that it can also cost you money. How exactly does that work?
Rob expounds on these bad credit tips:
- Carrying a balance on your credit card or cards will boost your score.
- Some outfit that calls itself a “credit repair company” can somehow get rid of your negative credit history. No one can do that.
- “Close your credit card accounts once you pay them off.” Actually, this can hurt you because it impacts two factors that determine your score— your credit utilization— and your credit history.
- “Monitor your credit score every day.” Now, I know we’ve advised folks to check their credit score and credit report fairly regularly— although I don’t think we ever advised daily as it sounds a bit excessive.
Next, Rob and Steve answer these questions at 800-525-7000 or via email at Questions@MoneyWiseLive.org:
- If you're self employed, how do you prepare for saving money?
- What's the difference between a trust and a will?
- If you're trying earn some money over the next few years of about $5,000 per year, should you look at certificates or the market?
- If you set up a 529 for a child who's not going to use it, can you use it for paying down your own personal debt?
- If finances are tight, should you take your Social Security to help ends meet?
- Would it be a good idea to sell a property at a loss in order to pay off your mortgage?
- What are the cutoff dates for various types of paperwork?
- If you're age 50 and your employer just made a Roth IRA available in your retirement plan and you're presently contributing everything to that, should you consider rolling the traditional account of about $80,000 into the Roth?
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