Lenders consider your credit score to determine whether to accept or decline your request for a loan. The score shows the lender how you handle debts. A low credit score to a lender means that you are likely to default on new loans. The reality is that very few people have a perfect credit score. Many people have encountered financial situations in the past that affected their ability to repay their debts on time. Hence, if you are trying to repair your credit score, you are not alone. However, you must get the right information and implement the right strategies to improve your credit score. Here are some of the myths that you must dispel when repairing your credit score.

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1. Repaying Your Debts Early Will Improve Your Score

You may think that paying your mortgage, car loan, or student loan before the due date will improve your score. The truth is that it does not except in the case of credit card payments. The only concern that lenders have about pre-payments is that they lose part of the interest they would have earned from your loan. You do not get extra credit for prepaying your loan. Do it if you want to stay out of debt, but not as a strategy for improving your score. However, paying your credit card balance before the end of the billing cycle will improve your credit score. If you make this a habit, your score will improve consistently. Also Visit bakenstein.com for finance updates.

2. You Get Extra Credit for Closing Credit Accounts

The rationale of closing credit accounts is that you will not overspend and end up deeper in debt. However, closing the accounts hurts your credit score more instead of repairing it. The credit score system considers how you handle your debt to determine your credit score. You eliminate this number by closing your credit accounts. In addition, you also eliminate your credit history for a number of years, which is necessary when calculating your score.

If you have bad credit, the best approach is to pay your debts on time, but leave your credit accounts open. If you are working with a repair agency, you may be forced to close the accounts. However, as long as you are working alone, keep all your accounts open. You can use one credit card or apply for a balance transfer card and perform debt consolidation on your own.

3. You Can Repair Your Credit Score By Opening Many Lines of Credit

We talked about the benefits of keeping your credit accounts open in the previous section. Unfortunately, the same does not apply to lines of credit. Instead, many lines of credit increase your risk. Every lender conducts an official inquiry of your credit score whenever you apply for a loan. The inquiries are also known as hard pulls. Having many of these hard pulls within a short period has a negative effect on your score. The lines of credit may also tempt you to increase your spending, which will increase your utilization rate and lower your credit score.


Repairing your credit score is necessary because a low score affects your ability to access loans. However, you must use the right approach and dismiss all myths to improve your score. The basic strategy of repairing your credit score can be summarized as paying your debts on time, verifying and disputing errors on your credit report, keeping your credit utilization rate low, and applying for, at most, three credit cards in a year.