Introduction: Why Credit Score Myths Still Matter
Your credit score is one of the most important numbers in your financial life — it affects your ability to get approved for loans, credit cards, mortgages, and even certain jobs. However, despite how crucial it is, many Americans still fall for credit score myths that can lead to costly mistakes.
According to Experian, nearly 60% of U.S. adults misunderstand how their credit score works. These misconceptions can keep you from improving your credit or even damage your score over time.
In this article, we’ll debunk the most common credit score myths, explain the truth behind each one, and show you how to build and maintain a healthy credit score in 2025 and beyond.
Myth #1: Checking Your Own Credit Score Hurts It
This is one of the most widespread credit score myths — that simply checking your score lowers it.
Truth: Checking your own credit score is considered a soft inquiry and has no impact on your credit score.
When you check your own score using tools like Credit Karma, Experian, or your bank’s app, you’re doing what’s called a “soft pull.” Only hard inquiries (such as when you apply for a loan or credit card) can slightly lower your score — and even then, the impact is temporary, usually just a few points.
✅ Pro Tip:
Review your credit reports regularly at AnnualCreditReport.com — it’s free once a year from each of the three major bureaus: Experian, Equifax, and TransUnion.
Myth #2: Closing Old Credit Cards Will Improve Your Score
Many people believe that closing an old or unused credit card will help them look more financially responsible. Unfortunately, that’s not how it works.
Truth: Closing a credit card can actually hurt your score.
Here’s why: Your credit score depends partly on the length of your credit history and your credit utilization ratio (the percentage of available credit you’re using).
When you close an old account:
- You lose that account’s credit limit, which increases your utilization ratio.
- You shorten your overall credit history.
Both of these can lower your FICO score.
✅ Pro Tip:
If an old card doesn’t have annual fees, keep it open and use it occasionally for small purchases. This helps maintain your credit history and keeps your utilization ratio low.
Myth #3: Carrying a Balance Helps Build Credit
This is one of the most damaging credit score myths out there.
Truth: Carrying a balance doesn’t help your credit — it only costs you money in interest.
Credit scoring models reward you for paying off your balance on time, not for carrying debt. The best approach is to keep your credit utilization below 30%, ideally under 10%.
✅ Example:
If your credit limit is $5,000, try to keep your monthly balance under $1,500, and pay it off in full before the due date.
Myth #4: Income Directly Affects Your Credit Score
Many people assume that making more money automatically means a higher credit score.
Truth: Your income is not a direct factor in your credit score.
Credit bureaus don’t know how much you earn. Instead, they evaluate:
- Your payment history (35%)
- Amounts owed (30%)
- Length of credit history (15%)
- Credit mix (10%)
- New credit inquiries (10%)
That said, higher income can help you manage debt better — but it doesn’t appear on your credit report or affect your FICO score directly.
Myth #5: You Need to Go Into Debt to Build Credit
Many Americans believe they must borrow money or go into debt to create a good credit history.
Truth: You can build credit without going deep into debt.
You can establish credit responsibly through:
- Secured credit cards
- Becoming an authorized user on someone else’s card
- Paying bills on time (some services like Experian Boost even count utilities and rent payments)
Building credit is about responsibility and consistency, not debt.
Myth #6: Only Credit Cards Affect Your Score
This is another half-truth that confuses many people.
Truth: Credit cards play a major role, but other accounts also matter.
Your credit report includes:
- Installment loans (auto loans, student loans, personal loans)
- Mortgage loans
- Lines of credit
- Retail credit accounts
Each of these contributes to your credit mix, which makes up about 10% of your FICO score. Lenders like to see that you can manage different types of credit responsibly.
Myth #7: Paying Off a Collection Instantly Removes It
If you’ve had a debt in collections, paying it off is a smart move — but many believe it disappears immediately from their report.
Truth: Paying off a collection doesn’t automatically erase it.
The account will remain on your credit report for up to seven years from the original delinquency date. However, paying it off will change its status to “paid,” which is better than “unpaid” and can help improve your score over time.
✅ Pro Tip:
After paying a collection, ask for a “pay for delete” agreement or a goodwill deletion — some agencies may remove the record upon request.
Myth #8: All Credit Scores Are the Same
You might think your credit score is a single, universal number — but it’s not.
Truth: There are multiple credit scoring models, and each may calculate your score differently.
For example:
- FICO Score (used by most lenders)
- VantageScore (used by many free credit apps)
You might have slightly different scores depending on which model or credit bureau is used. That’s why it’s important to focus on good financial habits — not chasing one specific score.
Myth #9: Your Credit Report Automatically Updates Daily
Many Americans assume that when they pay off a loan or credit card, the update appears immediately.
Truth: Credit reports don’t update in real-time.
Most lenders report to credit bureaus once a month, often at the end of your billing cycle. It may take up to 30–45 days before changes appear on your report.
✅ Pro Tip:
Be patient after major changes, and check your report periodically to ensure all information is accurate.
Myth #10: A Good Credit Score Guarantees Loan Approval
Even with a high credit score, you can still be denied a loan or credit card.
Truth: Lenders consider multiple factors beyond your score, including:
- Income and employment stability
- Debt-to-income ratio (DTI)
- Credit history details (late payments, collections)
A high credit score increases your chances, but it’s not a guarantee.
Myth #11: Your Credit Score Doesn’t Affect Renting or Jobs
This is a dangerous misconception for many young adults.
Truth: Landlords and employers can check your credit report — and it may influence their decision.
While employers don’t see your actual score, they can review your credit history to assess responsibility. Landlords often use it to evaluate whether you’ll pay rent on time.
✅ Tip:
If your score is low, offer a larger security deposit or find a co-signer to strengthen your rental application.
Myth #12: Once You Fix Your Credit, You’re Done
Fixing your credit is a great achievement, but it’s not permanent.
Truth: Credit maintenance is an ongoing process.
Late payments, high utilization, or new hard inquiries can still lower your score. Maintaining a good credit score requires continuous good habits:
- Paying bills on time
- Keeping balances low
- Avoiding unnecessary new accounts
How to Protect Your Credit in 2025
Now that we’ve debunked the top credit score myths, here are key actions to maintain a healthy credit profile this year:
- Check your credit report regularly – Identify and dispute errors early.
- Use less than 30% of your credit limit – This keeps your utilization low.
- Automate payments – Avoid missing due dates.
- Avoid unnecessary hard inquiries – Don’t apply for multiple loans at once.
- Diversify your credit mix – A blend of revolving and installment credit helps.
Conclusion: Know the Facts, Build the Future
Understanding the truth behind credit score myths can save you thousands of dollars in interest, improve your chances of approval, and help you achieve financial stability.
Your credit score doesn’t have to be a mystery. By learning how it really works and ignoring misinformation, you can take control of your financial future — starting today.
👉 Key takeaway:
Your credit score reflects your financial behavior — not your income or luck. Make informed choices, stay consistent, and your score will reward you over time.
