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Myths About Credit,  Credit & Credit Scores,  Credit Scores,  Financial Literacy & Education

Credit Score Myths That Are Holding You Back Financially

Author

Maya Jennings

Date Published

A young woman with curly hair looks confused as she examines a credit report, surrounded by colorful speech bubbles showing common credit myths like “Checking your credit hurts your score” and “You only have one credit score.”

When it comes to your credit score, misinformation is everywhere. And believing the wrong things can keep you stuck—paying higher interest rates, getting denied for better credit cards, or missing out on financial opportunities you deserve. Let’s clear up the most common credit myths that might be holding you back from building strong credit and gaining true financial confidence.

Myth #1: Checking your credit hurts your score

Let’s bust this one right away. When you check your own credit—using tools like Credit Karma, Experian, or even your bank’s app—it’s called a “soft inquiry,” and it has zero impact on your score. It’s only “hard inquiries,” like when you apply for a loan or credit card, that might cause a small, temporary dip. Checking your score regularly is actually a smart move—it helps you track your progress and catch any errors or fraud fast.

Tip: You’re entitled to a free credit report from each bureau (Equifax, Experian, and TransUnion) every week at AnnualCreditReport.com. Use it!

Myth #2: You only have one credit score

Wouldn’t that be nice? In reality, you have dozens of credit scores. The most common ones are FICO and VantageScore, and each comes in multiple versions tailored for things like credit cards, auto loans, or mortgages. Different lenders use different models, so don’t stress about small differences between them.

What to focus on: Keep your credit habits healthy across the board—on-time payments, low credit utilization, a mix of accounts—and your scores will follow.

Myth #3: Carrying a balance helps your credit

Nope. This is a costly misunderstanding. You do not need to carry a balance or pay interest to build credit. What matters is that your credit cards are active, paid on time, and ideally kept below 30% of your limit (10% is even better). Carrying a balance just means you’re paying interest for no reason.

Pro tip: Pay your statement balance in full every month. It shows responsible usage without racking up debt.

Myth #4: Closing old cards will improve your score

Tempting, but not usually a good idea. Length of credit history makes up about 15% of your score. Closing an old account, especially your oldest one, can shorten your average age of credit and increase your utilization rate if it had a high limit.

Instead: If there’s no annual fee, consider keeping old cards open and using them for small recurring charges (like a subscription) to keep them active.

Myth #5: Income and job status affect your credit score

Your credit score doesn’t know (or care) how much money you make. It’s based entirely on your credit behavior—not your income, job, bank balance, or education. Lenders might look at those factors when you apply, but they’re not part of your score calculation.

So what does matter?

Payment history (35%)

Credit utilization (30%)

Credit age (15%)

Credit mix (10%)

New credit inquiries (10%)

Myth #6: If you have no debt, you’ll have excellent credit

Debt-free doesn’t always mean credit-healthy. If you’ve never used credit—or stopped using it years ago—you might have a “thin” or inactive credit file. That can make it hard to get approved, even for basic credit products.

Solution: Use a no-annual-fee credit card and pay it off monthly. Or try a credit builder loan or a secured card to establish consistent, positive history.

Myth #7: A few late payments aren’t a big deal

Unfortunately, even one late payment can seriously hurt your score—especially if it’s over 30 days late. The damage can last for years. That’s why payment history is the biggest factor in your score.

What to do if you slip up: Contact your lender right away. Some will offer a grace period or remove the late mark as a courtesy if it’s your first offense. Then set up auto-pay or calendar reminders going forward.

Break Free From Credit Myths

A good credit score isn’t about being perfect—it’s about consistency and knowledge. And when you stop falling for these common myths, you start making smarter moves that add up over time.

Ready to take control of your credit? Keep learning, track your progress, and don’t be afraid to ask questions. You’ve got this.