🧾 Credit Score Myths: Separating Fact from Fiction
When it comes to credit scores, misinformation is everywhere. From myths passed down through generations to outdated beliefs shared on social media, many people make decisions that hurt their credit health — all because they don’t know what’s true and what’s not.
In this guide, we’ll bust some of the most common credit score myths, helping you better understand how your score really works and how to improve it. Whether you’re planning to buy a house, get a loan, or simply boost your financial wellness, this article is for you.
📌 What is a Credit Score?
Before jumping into the myths, let’s quickly understand what a credit score is.
A credit score is a three-digit number that represents your creditworthiness. In the U.S., it typically ranges from 300 to 850, and it’s based on your credit report, which includes your history of borrowing and repaying debts.
Lenders use your credit score to determine if you’re a good candidate for loans, credit cards, mortgages, and more. The higher your score, the better your chances of getting approved — and at lower interest rates.
💥 Top 10 Credit Score Myths Debunked
1. Myth: Checking your credit score will hurt it.
Fact: There are two types of inquiries — hard and soft. Soft inquiries (like checking your own score) do not affect your credit. Only hard inquiries (like applying for a new loan or credit card) might cause a small, temporary dip.
2. Myth: You only have one credit score.
Fact: You have many credit scores, depending on the scoring model (like FICO or VantageScore) and the credit bureau (Experian, Equifax, TransUnion). Scores may vary slightly based on which data is used.
3. Myth: Closing old accounts boosts your score.
Fact: Closing an old account can actually lower your credit score because it reduces your average account age and available credit limit, both of which are important score factors.
4. Myth: Carrying a balance improves your credit score.
Fact: Carrying a balance doesn’t help your score and could cost you money in interest. The best strategy is to pay off your credit card in full each month if possible.
5. Myth: Your income affects your credit score.
Fact: Your credit score is not directly influenced by your income. Instead, it’s based on factors like payment history, credit utilization, account age, and types of credit.
6. Myth: Debit card use builds credit.
Fact: Using a debit card does not affect your credit score. Credit scores are only impacted by accounts reported to credit bureaus, such as loans and credit cards.
7. Myth: Paying off a negative account removes it.
Fact: Even if you pay off a collection account, it can remain on your credit report for up to 7 years. However, paid collections are looked at more favorably than unpaid ones.
8. Myth: All debts are treated equally.
Fact: Credit card debt and installment loans affect your score differently. Revolving credit (like credit cards) tends to have a bigger impact on your score due to utilization rates.
9. Myth: You must be in debt to build credit.
Fact: You don’t have to carry debt to build good credit. You just need to show that you can responsibly manage credit — such as using a credit card and paying it off monthly.
10. Myth: A good credit score guarantees approval.
Fact: Lenders look at more than just your credit score. Income, employment history, and debt-to-income ratio also play a role in approval decisions.
✅ How to Build and Maintain a Good Credit Score
Now that the myths are debunked, here are some tips to help you boost your score:
- Pay all bills on time — even one missed payment can hurt your score.
- Keep credit card balances low — aim for a utilization rate under 30%.
- Avoid opening too many accounts at once — multiple hard inquiries can lower your score.
- Keep older accounts open — the longer your credit history, the better.
- Monitor your credit report regularly — look out for errors and dispute them.
🧠 Final Thoughts: Knowledge is Power
Understanding your credit score is one of the most powerful financial tools you can have. By knowing the truth behind these common credit score myths, you’re already ahead of the curve.
Remember, credit isn’t just about buying things — it’s about financial freedom. With the right habits and accurate information, anyone can take control of their credit and reach their financial goals.