It’s been said that a white lie never really hurt anyone. We don’t know if that’s true or not, but they might be good for your credit score. Here are a few little lies that may help your FICO. It’s not really being dishonest (there’s enough of that going around lately), it’s more like embellishing your side of the story so financial providers will look more favorably upon you.
Most lenders don’t report every single transaction or late payment. That’s not necessarily something you want to bring to their attention. If you’ve slipped up a few times, and have ended up paying late more than once, and it doesn’t appear on your credit history, just thank the powers that be and make every effort to pay on schedule in the future. Conversely, if your payment history is immaculate, you may want to say something if there’s something lacking on your report. Missing information can make your credit history look not-so-appealing to potential lenders. If a good portion of your accounts are missing some information, a creditor may not have enough info to decide whether or not you’re creditworthy. To flesh out your credit report, call those lenders who aren’t so good at reporting transactions, and ask them to start communicating more about your credit history. Another thing to consider: The reports you’ll receive from each of the three main credit bureaus (Experian, Trans-Union, and Equifax) will most likely contain different information. Just because there’s a blemish on one report, doesn’t mean it will appear on the others.
A dormant account may be an asset. Activating a card, then not using it, can cause the lender to “forget” to report that information to the credit bureaus. When you stop using a card, it drops to the recesses of your credit file, and that can happen anywhere from three months to a couple of years later. A hibernating account will help to clean up your report a little bit. If you seem to pay bills late, and often, a late-payment blemish will have a lower effect on your score over time. Unused cards still make up part of your total credit line, until you decide to cancel it. But, keep in mind, canceling a card can hurt your credit score. Keep an eye on those dormant accounts, to make sure you aren’t accruing fees- or worse, someone hasn’t stolen your account.
If your lender doesn’t report what your credit limit is, look at it as a blessing in disguise. Without knowing what your total limit is, other credit card companies are less likely to bombard your mailbox with those annoying (and sometimes tempting!) preapproved offers. When Capital One started reporting its customers’ highest balance, instead of reporting their credit limits, people’s credit scores went down because other lenders thought that they were closer to reaching their credit limit. As a result, the Fair Isaac Corporation no longer includes this information when they figure a person’s score. A lender’s not reporting your limit may be a good thing, if those limits are low. Other companies may see a lower limit as a sign that the banks are keeping a tight rein on your spending power. Some lenders have a company policy of not reporting credit limits, but it can never hurt to ask.
If your lender occasionally lets something slide (intentionally or not), just consider yourself fortunate. That late payment they forgot to report, or a business that claims you’ve been their customer for five years, (when it’s actually only been two)- can improve your credit score and give other lenders an overstated idea of your creditworthiness. But, don’t be surprised if the omissions catch up with you one day, and you find a few “surprises” on your next credit report.
FAQ: How do I check my Free Credit Report?
Your credit report is the basis for your financial standing. No matter how slick or smart you may be, no bank will touch anyone with a low credit score. It's their money, why would they want to take a bigger risk than they need to?
If you don't know where your credit report score is at, now's the time to take a peek. Don't get surprised with a low credit score when you go in to review your report with a potential lender or even an employer, find out for yourself within minutes.
