Then there’s the Urban Credit Legend

 

Urban legends are just a fact of computer life. There are the old ones that have been around for years and new ones that pop up everyday. It’s the modern version of gossiping over the back yard fence and most of them are false but harmless. When it comes to the urban legends about credit they really, however, they are harmful.

 

“You can pick a lock with a credit card” may be true but it’s a bad idea…you could mess up the card. Use a butter knife or a piece from a plastic milk bottle. But what were you trying to pick a lock for anyway?

 

These are a few urban legends that can hurt you.

 

Legend: Cutting up a credit card closes the account.

 

Wrong! You must call the lenders phone number on the back of the card to cancel the account…so piece that card back together and get the phone number, make the call and cancel the account.

 

Legend: Closing an account removes it from your record.

 

Wrong! Credit reporting agencies are a rather unforgiving lot and they have memories like proverbial elephants. Accounts remain on your credit report for seven years even the ones you have closed.

 

Legend: Even good credit information drops off your report after seven years.

 

Wrong! Unlike humans, credit reporting agencies remember the good stuff forever (even if the accounts are closed) and forget the bad stuff after seven years. Unless, of course, you believe this

 

Legend: Paying off an old delinquent account improves your credit.

 

Wrong! Paying off an old delinquent debt actually starts that seven year clock ticking again.

 

Legend: Car dealers need to run your credit before you take a test drive.

 

Wrong! This is a fast one pulled by those super duper 60-day wonder salesmen. Don’t believe a word of it. You have not yet applied to buy anything and there is no reason for to check your credit until or IF that time comes.