red and green children's blocks arranged to spell "MONEY MAZE"

(In part 1 of this article, we talked about three unhelpful myths about gaining control of your credit—it’s easier than you think. Read on for more…)

Myth 4: Checking Your Credit Will Lower Your Score

When you check your own credit, this will not lower your score, nor will other kinds of general checks, such as an informational check by a potential employer. That’s because there are two types of inquiries that appear on your report: hard and soft inquiries.

 Hard inquiries are from the credit checks done by companies you wish to get credit from. These do affect your score and lower it slightly each time you get an additional one or two checks added to your score; though they only stay on for two years, so the number of checks against you goes down over time.

 Soft inquiries are checks for informational purposes, such as when you check your report or score online or when companies are looking for information about you, for example, when you apply for a job. These checks can also occur when a company is seeking information for promotional purposes, such as whether you would be a candidate for a product or service they are offering. These soft inquiries don’t affect your score.

Myth 5: Shopping Around For a Loan Will Lower Your Score

This is a very common myth—that you can severely lower your credit score when you are looking for a mortgage, home equity loan, or car loan and you apply to multiple providers. But this search will only appear on your report once for the same kind of inquiries which you make within 14 days of each other. So if you can do your searching for the right vendor within that 14-day window, you will only get a single hard inquiry on your report. The only exception is for credit cards, where you get a hard inquiry for each application.

Myth 6: The Only Way to Improve a Credit Score is to Remove All Negative Items

While it is true that removing negative items will raise your score, this is only one factor that contributes to your rating. As a result, if you build “positive credit,” that will further increase your score. In fact, you might even get your numbered score lowered because you show NO credit, and THAT could lead you to be turned down for a loan. No credit means you haven’t built up any “positive credit” with card companies. Instead, by applying for small amounts of easily-manageable credit, you can begin to build positive ratings and actions on record. Doing so is one more very important, and achievable, piece of the credit rebuilding process.

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About The Author

Laura Tabsharani Navarro's picture

Laura Tabsharani Navarro, an award winning Talent-Entertainment Media expert, Business/Finance and Credit professional, has the ability to heighten the influence, credibility and exposure of her clients. Laura has truly supported, coached, and launched hundreds of people around the world in bettering and defining their goals of entrepreneurial success and financial independence. She has appeared on The Dr. Phil Show, been a keynote speaker for Powerful Women International, featured in 110 Magazine, received the 2011 "Mother of Year" award from Woman of Legacy, and was the top producer in mortgage banking for Chase Bank, Wells Fargo, and Financial Strategies funding millions over a few short years. Laura founded " Epic Global Talent” where she continues branding clients into the Entertainment industry in Acting, Modeling, Television, Film, Commercial, Print, and Literary.

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