Credit Score Myths You Need to Stop Believing
Your credit score plays a major role in your financial life. Unfortunately, there are many myths about how it works. Let’s debunk the most common ones so you can manage your credit wisely.
Myth #1: Checking Your Own Credit Hurts Your Score
Truth: Soft inquiries, such as checking your own score, do not impact your credit. You can safely monitor your credit report without any harm.
✅ Use AnnualCreditReport.com to access free reports.
Myth #2: Closing Old Credit Cards Will Improve Your Score
Truth: Closing old accounts can reduce your credit history length and increase your utilization rate, possibly lowering your score.
Myth #3: You Need to Carry a Balance to Build Credit
Truth: Carrying a balance isn’t necessary. You build credit by using it and paying off your balance in full on time.
Myth #4: Paying Off Debt Removes It from Your Report Immediately
Truth: Paid debts can remain on your credit report for up to 10 years, especially if they were in good standing.
Myth #5: Income Affects Your Credit Score
Truth: Your salary or job title does not influence your credit score. Scores are based on credit behavior, not income.
Myth #6: One Missed Payment Isn’t a Big Deal
Truth: A single missed payment can stay on your report for 7 years and cause a significant drop in your score.
Myth #7: Credit Scores Are the Same Across All Bureaus
Truth: You have multiple scores, and they can vary between Experian, Equifax, and TransUnion based on what data they have.
Myth #8: Only Credit Cards Build Credit
Truth: Loans like auto, student, or personal loans also build credit when paid on time.
Myth #9: You Can’t Have a Good Score Without Debt
Truth: You can maintain an excellent score by using credit cards responsibly and paying them off each month—no long-term debt needed.
Myth #10: Paying Off Debt Instantly Raises Your Score
Truth: Updates take time. Credit scores typically reflect changes once lenders report new data, often monthly.
Bonus Myth: Credit Repair Companies Can Instantly Fix Your Score
Truth: No one can remove accurate negative items. You can dispute errors yourself and build credit over time.
Tips to Build and Maintain a Healthy Credit Score
- Pay all bills on time—every time
- Keep credit utilization under 30%
- Check all three credit reports for errors
- Avoid closing old accounts unnecessarily
- Limit hard inquiries from frequent loan applications
Conclusion
Credit myths can cost you. Knowing how credit really works gives you the power to build a strong financial foundation. Don’t fall for the myths—follow the facts and watch your credit grow.
✅ Start by reviewing your report and setting up payment reminders today!
