The Truth About Credit Scores: Myths vs. Facts

Your credit score is one of the most important numbers in your financial life, yet there are many misconceptions about how it works. Let’s separate fact from fiction and help you take control of your credit rating.

Myth #1: Checking Your Credit Score Hurts Your Score

Fact: Checking your own credit score is considered a “soft inquiry” and does not affect your score. However, multiple “hard inquiries”—such as when applying for credit cards or loans—can have a small impact.

Myth #2: Closing Old Credit Accounts Improves Your Score

Fact: Closing old accounts can actually hurt your score because it reduces your credit history length and overall available credit. If you must close an account, consider how it might impact your credit utilization ratio.

Myth #3: You Need to Carry a Balance to Build Credit

Fact: Carrying a balance on your credit card does not improve your score and can lead to unnecessary interest payments. Paying off your balance in full each month is the best strategy for maintaining a strong credit score.

Myth #4: A Higher Income Means a Higher Credit Score

Fact: Your income is not directly factored into your credit score. What matters is how responsibly you manage your credit, including making on-time payments and keeping your credit utilization low.

Myth #5: Only Late Payments Impact Your Score

Fact: While late payments do have a significant impact, other factors also matter—such as credit utilization, length of credit history, and the mix of credit types you use.

 

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