Credit Score Myths Debunked

Your credit score can impact everything from getting approved for a loan to securing an apartment or even a job. Yet despite its importance, credit scores remain widely misunderstood. Misinformation spreads easily—and believing these myths can actually hurt your financial health.

In this article, we’ll debunk the most common myths, explain what really affects your credit, and give you the clarity you need to make smarter money moves. Whether you’re just starting to build credit or trying to boost your score, understanding the facts is essential.

💡 Why Credit Scores Matter

Before we dive into the myths, it helps to understand why it is such a big deal. A credit score is a numerical summary of your creditworthiness, typically ranging from 300 to 850. Lenders use it to evaluate how risky it is to lend you money.

A higher score can mean:

  • Lower interest rates on loans
  • Easier approval for credit cards
  • Better insurance premiums
  • Increased negotiating power

Now let’s separate fact from fiction.

🔍 Myth #1: Checking Your Own Credit Score Hurts It

Reality: Checking your own credit score is considered a soft inquiry, and it does not impact your score.

Soft inquiries occur when you check your own score or when companies check it for pre-approval offers. In contrast, hard inquiries—such as when you apply for a loan or credit card—can slightly reduce your score temporarily.

✅ Pro tip: Use free tools like Credit Karma, Experian, or your bank’s app to check your score regularly.

🕰️ Myth #2: Closing Old Credit Cards Helps Your Score

Reality: Closing old accounts can actually lower your credit score.

Here’s why:

  • It may reduce your average account age (which affects 15% of your score)
  • It can increase your credit utilization ratio, making it look like you’re using more of your available credit

✅ Pro tip: If you’re not using a card, keep it open (especially if it has no annual fee) and use it occasionally to keep it active.

💳 Myth #3: Carrying a Balance Improves Your Score

Reality: Carrying a balance on your credit cards does not help your score—it just costs you interest.

The idea that you need to carry debt to build credit is completely false. What actually matters is that you:

  • Use your credit card
  • Pay on time
  • Keep your balance low relative to your credit limit (ideally under 30%)

✅ Pro tip: Pay your full statement balance each month to avoid interest charges and still build good credit history.

🧾 Myth #4: Your Income Affects Your Credit Score

Reality: Your income is not included in your credit score.

Credit scoring models like FICO and VantageScore don’t consider income at all. Instead, they focus on your borrowing and repayment behavior, including:

  • Payment history
  • Amounts owed
  • Credit history length
  • Credit mix
  • New credit

While lenders may look at your income to assess affordability, it won’t impact your actual score.

🏦 Myth #5: You Only Have One Credit Score

Reality: You actually have multiple credit scores, depending on the credit bureau and scoring model used.

The three major credit bureaus—Experian, Equifax, and TransUnion—each collect slightly different data. On top of that, there are multiple scoring models (like FICO 8, FICO 9, VantageScore 4.0, etc.).

✅ Pro tip: Don’t obsess over small differences between scores—focus on improving your overall credit habits.

🕳️ Myth #6: Paying Off Debt Instantly Fixes Your Score

Reality: While paying down debt is great, it won’t necessarily instantly boost.

Credit scores reflect long-term behavior. Even after paying off a big balance, it can take a few billing cycles for the change to be reflected. Additionally, past delinquencies or defaults may still linger on your report for up to 7 years.

✅ Pro tip: Continue using credit responsibly after paying off debt to gradually build a strong score.

🛠️ Myth #7: Credit Repair Companies Can “Erase” Bad Credit

Reality: No legitimate company can remove accurate negative information from your credit report.

Credit repair agencies often promise fast fixes, but most can only help you dispute inaccuracies—something you can do yourself for free by contacting the credit bureaus directly.

✅ Pro tip: Review your credit report regularly at AnnualCreditReport.com and dispute any errors.

🗓️ Myth #8: You Must Use Credit Constantly to Build Credit

Reality: You don’t need to use credit every day to maintain a good score.

Using your cards occasionally and paying them off on time is enough. In fact, using credit too often and carrying high balances can hurt your score.

✅ Pro tip: Use a small recurring charge (like a subscription) and set up automatic payments to build credit with minimal effort.

📉 Myth #9: A Bad Score Lasts Forever

Reality: Credit scores can be rebuilt over time with the right habits.

Most negative marks (like late payments or collections) fall off your report after 7 years. As you build a positive credit history with on-time payments and responsible use, your score will improve—even if it starts low.

✅ Pro tip: Focus on consistent improvement, and your score will reflect that over time.

🧠 Final Thoughts: Knowledge Is Power

Credit score myths can be damaging, but knowing the truth empowers you to take control of your financial future. Rather than fearing your credit report, use it as a tool to learn and grow.

To recap, the most important credit score truths are:

  • Check your score often—it won’t hurt it.
  • Keep old accounts open when possible.
  • Pay balances in full.
  • Your behavior matters more than your income.
  • Improvement takes time, but it’s always possible.

By adopting smart habits and staying informed, you can build a strong credit profile that supports your goals—from homeownership to financial freedom.