INDIANAPOLIS, Ind.-There are lots of misconceptions about credit, everything from how it’s built to how to maintain it.
Pete the Planner is breaking down three of the more widespread “credit myths.”
"Having multiple credit cards helps your credit score."
This is not true.
However, having multiple types of credit lines (i.e. credit card, mortgage, student loans) does help your credit score.
"How does closing a credit card impact your credit score?"
Closing a credit card has a negative impact on your credit score.
Pete The Planner says it only takes 6-9 months for your score to recover.
He recommends closing any cards you’re not actively using to avoid the temptation to over-spend.
"Credit card companies won’t let you open a new credit card if it’s not in your best interest."
This is 100 % false!
“We’re convinced a bank (or credit card company) wouldn’t make a bad business decision by letting me borrow money I shouldn’t borrow. No, that’s a brilliant business decision because you’re going to be paying a lot of interest,” said Pete the Planner.