What Really Impacts Your Score
Your credit score is one of the most important numbers in your financial life. It affects whether you can buy a home, qualify for a loan, or even land certain jobs. Yet despite its importance, myths about credit scores are everywhere — and believing them can cost you money, opportunities, and peace of mind.
In this post, we’ll break down the most common credit score myths and reveal the truth behind them.
Myth 1: Checking Your Credit Hurts Your Score
The Truth: Checking your own credit report or score is considered a soft inquiry and does not affect your score. Only hard inquiries (like applying for a loan or credit card) can cause a temporary dip.
Myth 2: Carrying a Balance Improves Your Score
The Truth: Carrying debt month-to-month doesn’t help your score — it just costs you interest. What matters is your credit utilization ratio (the percentage of credit you’re using compared to your limit). Keeping utilization below 30% is ideal.
Myth 3: Closing Old Accounts Boosts Your Score
The Truth: Closing old accounts can actually hurt your score because it reduces your available credit and shortens your credit history. If an old card has no fees, keep it open to strengthen your profile.
Myth 4: Income Directly Impacts Your Score
The Truth: Your salary isn’t part of your credit score calculation. Lenders may consider income when deciding whether to approve you, but your score is based on credit behavior — not earnings.
Myth 5: Paying Off Collections Instantly Fixes Your Score
The Truth: Paying off collections is important, but the account may still appear on your report for up to seven years. Over time, its impact lessens, and consistent positive behavior helps rebuild your score.
Myth 6: You Need Credit Cards to Build Credit
The Truth: While credit cards are a common tool, other products like auto loans, student loans, or secured credit cards also build credit. The key is responsible repayment.
Real-Life Example
Imagine someone who avoids checking their credit because they fear it will drop. They miss errors on their report — like a mistaken late payment — that could have been corrected. That myth costs them thousands in higher interest rates.
How to Take Control of Your Credit
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Check reports regularly: Use free annual credit reports to spot errors.
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Pay on time: Payment history is the single biggest factor in your score.
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Keep utilization low: Aim for under 30%, and under 10% if possible.
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Diversify credit types: A mix of installment and revolving accounts helps.
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Dispute inaccuracies: Correcting errors can quickly improve your score.
Final Thoughts
Credit scores aren’t mysterious — they’re built on clear rules. By ignoring myths and focusing on proven strategies, you can protect your financial health and unlock opportunities for the future.