Introduction

When it comes to money management, few things are as misunderstood as credit scores. A strong score can help you qualify for loans, credit cards, and even rental housing, while a weak score can hold you back. Unfortunately, there are many credit score myths you should stop believing if you want to take control of your financial future. In this article, we’ll uncover the most common myths and reveal the truth behind them.

Myth 1: Checking Your Credit Score Hurts It

Many people believe that checking their own credit score lowers it. The truth? It doesn’t. When you check your score through a financial app or credit bureau, it’s considered a soft inquiry, which has no impact on your credit. Only hard inquiries—when lenders pull your report during a loan or credit application—can cause a small, temporary dip.

Myth 2: Closing Old Accounts Improves Your Credit

It might seem logical to close credit cards you don’t use, but this can actually harm your score. Closing accounts reduces your available credit and shortens your credit history—two factors that impact your score. Keeping old accounts open (with zero balance) can help maintain a stronger score.

Myth 3: Carrying a Balance Improves Your Score

This is one of the most expensive myths. Carrying debt month-to-month doesn’t boost your score—it only costs you interest. Credit bureaus reward responsible use, which means paying off your balance in full each month is better for your score and your wallet.

Myth 4: Your Income Determines Your Credit Score

High income doesn’t equal a high credit score. Your score is based on your credit behavior, not your paycheck. Payment history, credit utilization, and account age matter far more than how much you earn. This means even people with modest incomes can build excellent credit through smart habits.

Myth 5: Paying Off Debt Instantly Fixes Your Score

While paying down debt is a positive step, it doesn’t guarantee an overnight increase. Credit scores reflect long-term patterns. Consistency—like paying bills on time, keeping balances low, and avoiding too many new applications—matters most. Think of credit as a marathon, not a sprint.

Myth 6: All Debts Are Equal

Not all debts affect your credit score in the same way. For example, installment loans like mortgages can actually improve your score if paid consistently, while high revolving debt (like credit cards) can drag it down quickly. Understanding how different types of credit impact your score is essential.

Myth 7: Once Bad, Always Bad

Many people believe a bad credit score lasts forever. In reality, negative marks fade over time. Most items, such as late payments, drop off after seven years. With discipline and consistency, you can rebuild your score even after setbacks.

How to Separate Facts from Myths

Understanding your credit score requires more than guesswork. Reliable sources like the Consumer Financial Protection Bureau (CFPB) and major credit bureaus provide accurate, updated information. Always cross-check what you hear against credible sources before making financial decisions.

Why These Myths Persist

So why do these myths stick around? Partly because credit scoring models are complex and not fully transparent. Lenders, banks, and even well-meaning friends may unintentionally spread misinformation. By educating yourself, you gain the power to make smarter choices that strengthen your financial health.

Practical Tips for Building Credit the Right Way

• Always pay bills on time—payment history makes up 35% of your score.
• Keep credit utilization under 30%, ideally under 10%.
• Check your credit report regularly for errors via AnnualCreditReport.com.
• Avoid applying for multiple credit accounts in a short period.
• Keep your oldest credit accounts open, even if unused.

Internal Resources

Explore more financial guides on our site:

• How to Improve Your Credit Score in 30 Days
• 5 Fast Ways to Boost Your Credit Score