Credit Score Myths Debunked

The Truth: Checking your own credit score is a soft inquiry and has absolutely no impact on your score.

Only hard inquiries—when a lender checks your credit for a loan or credit card application—can affect your score (and even then, minimally and temporarily).

Check your score often: Use free services like Borrowell or Credit Karma to monitor your score regularly. It's smart financial hygiene.

The Truth: This is completely false and will only cost you money in interest.

You build credit by having accounts open and paying on time—not by paying interest. Someone who pays their balance in full every month builds credit just as effectively as someone carrying a balance.

The right approach: Use your card, pay it off in full, repeat. You'll build credit AND avoid interest charges.

The Truth: Closing credit cards usually HURTS your score for two reasons:

1. Reduces available credit: If you have $10,000 total credit and close a card with a $3,000 limit, your utilization percentage increases on your remaining cards.

2. Shortens credit history: If you close your oldest card, you lose that history.

When to close a card: Only if it has an annual fee you can't justify and you can't downgrade to a no-fee version.

The Truth: Your income is NOT a factor in your credit score calculation.

High earners can have terrible credit, and minimum-wage workers can have excellent credit. What matters is how you manage the credit you have, not how much you earn.

What IS true: Higher income can help you get approved for cards with higher limits, which can indirectly help utilization.

The Truth: You have multiple credit scores.

- Equifax and TransUnion each calculate their own scores - Different scoring models exist (similar to how Fahrenheit and Celsius both measure temperature) - Lenders may use proprietary scores

Don't obsess over the exact number. Focus on the range (good, very good, excellent) and the trend (improving or declining).

The Truth: Paid debts and accounts remain on your credit report.

- Positive accounts (paid as agreed): Stay for 10+ years—good for you! - Negative accounts (late payments, collections): Stay for 6 years from last activity

Paying off collections: While the account stays on your report, it will show as paid which looks better than unpaid. Some newer scoring models ignore paid collections entirely.

The Truth: Responsibly managed debt can actually IMPROVE your credit.

Having a mortgage, car loan, or credit cards—and paying them on time—shows lenders you can handle debt. This positive payment history helps your score.

Key word: responsibly. Late payments and maxed-out cards hurt. On-time payments and low balances help.

The Truth: There's nothing a credit repair company can do that you can't do yourself for free.

They can: - Dispute errors on your report (you can do this) - Negotiate with creditors (you can do this) - Wait for time to pass (everyone does this)

Red flags: Any company promising to remove accurate negative information or boost your score quickly is likely a scam.