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9 myths on how to build better credit

Build Better Credit » 9 myths on how to build better credit

Paying off loans early is better than making payments
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Paying off loans early is better than making payments

"It's a Catch-22," says Sarah Davies, senior vice president of analytics, product management and research for VantageScore Solutions, because while it may be good for your personal finances to pay off a loan, it doesn't do much for your credit score.

Indeed, a closed, paid-off account adds to your score, but an open credit account in good standing boosts it more.

That's because an open account shows you're consistently handling credit wisely. A closed account only shows good payment behavior in the past and becomes less and less predictive of future habits.


 

 

 

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