These Personal Credit Facts Are As Mind-Blowing As They Are Useful

Unless you were raised by extremely finance-savvy parents, chances are you were pretty blindsided when you discovered just how important your personal credit is. With the help of CreditRepair.com, let's demystify some lesser-known facts about credit.

1. Canceling an older credit card could hurt your score

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Cut up those cards if you must (#self-love), but don't close that account! Having a long credit history is generally a good thing. Closing an older account can lower your average age of accounts, which can hurt your score.

2. Prepaid credit cards do not improve your credit

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Prepaid cards are payment cards that have a predetermined value stored on the card itself. It's kind of like you're borrowing money from yourself, meaning it won't affect your credit score.

3. Being an authorized user can boost your score with no extra effort

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In some cases, this is true. But be careful — being added as an authorized user means that all positive and negative aspects of that account's payment history will appear on your credit.

4. There's another type of credit score: UltraFICO™ Score

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The UltraFICO™ Score is sort of like a secret food item on your personal credit menu. It uses more information than your regular FICO(R) Score, like voluntarily supplied banking data. Because your UltraFICO™ score considers more of your financial history than your standard FICO(R) Score, it can often be higher.

5. Late payments impact your credit report after 30 days

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No responsible adult has ever missed a bill payment, right? Ha, we wish. While late payments won't always have an immediate negative impact, making your payments on time is very important to having good personal credit.

6. Credit checks on existing accounts count as soft inquiries

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Eventually, you'll outgrow that $500 spending limit and be ready to take your credit commitment to the next level. When you do, asking your current credit card to expand your credit limits can have the same positive effect as opening a new line of credit. However, credit checks for existing accounts will not affect your score.

7. The only time you should close unused credit accounts is when they come with an annual fee

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Unlike dating, when it comes to personal credit, the longer your history, the better. So, keep those old accounts open! As long as it's not costing you anything, they can help you maintain your score.

8. The ideal credit utilization ratio is 30% or less

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Before you burst into tears from confusion, let us explain. Your credit utilization ratio is how much of your allotted credit you've used across ALL accounts. Most experts suggest that you should owe 30% or less of your credit limit.

9. Credit is not as scary as you think!

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We've all made some mistakes when it comes to personal credit (thank you, college campus credit card pushers), but it's never too late to be better. Credit scores aren't set in stone! You do have the power to change them, and small decisions can create big positive ripples.

Improve your credit with CreditRepair.com

Credit doesn't have to be confusing or intimidating. If you need help improving your credit, visit CreditRepair.com

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