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SOURCE: FOOL.com
Credit Lies and Urban Legends
By Dayana Yochim (TMF School)
November 12, 2004
We'd like to take a moment to tackle a few credit reporting misconceptions and rumors that just won't die. This is what we call a "lightning round" Q&A, designed to quickly disperse the crowd whispering around the water cooler. If you're looking for deeper, more meaningful insights into the credit reporting industry, you won't find it here. (It's here.)
MYTH: Cutting up a credit card closes the account.
FACT: Piece those shards back together, and get your lender's phone number from the back of the card. To cancel an account, you've got to call the credit card company and tell them so. (No, burning the bills in effigy doesn't count, either.)
MYTH: Closing an account removes it from your record.
FACT: Sorry, nope again. The credit reporting industry has a long and somewhat unforgiving memory. Like that high school yearbook photo, some blasts from the past won't expire soon enough. (Get your calendars out if you've got a few unseemly entries, and count the days until you're free from the reminders.) (Tip: If you want to get your mother to stop sharing photographic evidence with visitors, you'll have to start calling more often.)
MYTH: Even good information drops off your report after seven years.
FACT: Unlike the pessimists among us, credit bureaus prefer to remember the good times longer than the bad. If you have an account that was in good standing but is now closed, it could appear on your record indefinitely reflecting kindly...
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