Unfortunately, the knowledge of how credit works is a somewhat foreign concept to most Americans.  Education curriculum does not focus enough on personal finance, and many kids are sent out into the world unprepared.


Credit scores are based on credit reports.  The distinction between terminology is important.  Also, credit scores are based on five different financially based factors: payment history, credit usage, credit age, account mixture, and inquiries.  Below are a few more pieces of information that most people do not know.

Personal inquiries do not affect credit scores.

Contrary to popular belief, personal inquiries do not affect credit scores.  If a person were to have several businesses tap into their credit history within a few months, then that would affect their credit score negatively.  Individuals are allowed to access their credit report, however, many times they please, however often.

Parking tickets and library fees do affect credit scores.

Be wary of those unpaid parking tickets.  They could come back to bite you in the rumpus.  State transportation agencies report neglected parking tickets to the three main credit bureaus.

Do not think that just because they will not affect life in any obvious way that those unpaid parking tickets have simply disappeared.  Also, to reverse the stain of unpaid fees could cost up to three times as much as the original fine.

An attorney is not necessary for credit repair.

Do not make the mistake of thinking that it will take thousands of dollars and a well-dressed lawyer to correct those nasty credit mistakes.  It is entirely possible, and very common, for people to take certain steps to improve their credit without legal representation.

All it takes is time and an honest effort to research credit repair and obtain the necessary information to move forward in life with a more acceptable credit rating.

Judgments last ten years.

A judgment is when a debt is owed to a company, and they sue the debtor.  Once the judge decides in favor of the lender, a judgment is issued on that person’s credit report.  Judgments are very severe.  It is recommended that a person do everything they can to avoid this situation.

A judgment will stay on a person’s credit report forever.  It will only affect the person’s credit score for the first ten years, but these things do not fall off.

Foreclosures fall off after three or four years.

Foreclosures, however, do fall off of a credit report after only three or four years.  Most people assume that their financial life is completely wrecked when a foreclosure is invoked, but that is not the case.  Points will be restored to the debtor’s credit score, but the foreclosure does remain a matter of public record.


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