Understanding your credit report can be confusing. When looking for answers, some of things you will hear will be credit report myths that need to be debunked. Here are five of the most common myths you should be aware of:

Checking my credit is unnecessary if I pay on time

Many people think that just because they pay their bills on time, they don't need to check their credit reports. However, your credit information can become compromised due to an error or even fraud, and the fastest way to catch these credit issues is by regularly checking your reports.

I will hurt my credit score if I check my own reports

The difference between a hard check and soft check is the reason why checking your own credit reports will not impact your score. A hard credit check — also called a "hard inquiry" — is used by lenders and creditors to review all of your credit information. Several hard pulls can impact your credit negatively. However, a soft pull — also called a "soft inquiry" — does not.

Paying off a debt removes it from my credit reports

Borrowers are often frustrated to learn that after they have paid off a debt, it isn't automatically removed from their credit reports. Negative entries generally aren't removed for seven years and as many as 10 years for serious delinquencies, foreclosure or bankruptcy. If you believe there are inaccurate negative items on your credit report, notify the credit reporting agency immediately.

Only one entry per debt will display on my reports

If you owe money to a company that has sold the debt to a collection agency, both accounts might show on your credit report. This means you could have two negative entries on a credit report for a single debt. If you have questions about this, contact the credit bureau or speak to a credit repair professional.

Canceling an old credit card will hurt my credit history

Canceling your oldest credit card will not reduce your credit history or negatively impact your credit. However, closing a card with a big credit limit when you have outstanding debt could affect your credit utilization ratio. So, be sure to close credit card accounts only when you have a small line of credit or zero balance among all your cards.

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