Building and maintaining a good credit score is essential for financial health, but unfortunately, many people still fall for common myths that can actually hurt their credit in the long run. In this post, we’ll break down the most persistent credit score myths and explain what’s actually true in 2025, so you can make smarter decisions and improve your credit the right way.
What Is a Credit Score?
Before we bust the myths, let’s quickly clarify what a credit score is. A credit score is a numerical representation of your creditworthiness, typically ranging from 300 to 850. Lenders use this score to evaluate how risky it is to lend you money or extend you credit. The higher your score, the more trustworthy you appear as a borrower.
Myth 1: Checking Your Credit Score Will Hurt It
The truth: Checking your own credit score is called a “soft inquiry” and has no impact on your credit. You can—and should—regularly check your credit to stay on top of changes, spot fraud, and track your progress. It’s only “hard inquiries,” like when a lender checks your score for a loan application, that can slightly affect your score.
Myth 2: You Only Have One Credit Score
The truth: You actually have multiple credit scores. Different credit bureaus (like Experian, Equifax, and TransUnion) calculate scores using various models, such as FICO or VantageScore. Lenders may use different scores depending on the type of loan (credit card, mortgage, auto loan), so don’t assume one score applies to all.
Myth 3: Closing a Credit Card Improves Your Credit
The truth: Closing a credit card can actually hurt your score. This is because it reduces your overall available credit, which can increase your credit utilization ratio—a key factor in your score. Unless the card has a high annual fee or you're not managing it well, it’s often better to keep it open.
Myth 4: You Need to Carry a Balance to Build Credit
The truth: You don’t need to carry a balance to build credit. In fact, carrying a balance and paying interest can hurt your finances. What helps your credit is using credit responsibly and paying off your balance in full each month.
Myth 5: Income Affects Your Credit Score
The truth: Your income is not included in your credit score. Lenders may consider your income when you apply for credit, but it does not directly affect your score. What matters more is how you manage the credit you already have.
Myth 6: Paying Off a Debt Removes It from Your Credit Report
The truth: Even after you’ve paid off a debt, it can remain on your credit report for up to 7 years (if it was negative) or 10 years (if it was positive). However, paid-off debts reflect responsible behavior and can still improve your overall profile.
Myth 7: All Debt Is Bad for Your Credit Score
The truth: Not all debt is created equal. Having a mix of credit types—like a mortgage, car loan, and credit card—can actually boost your score, as long as you’re making timely payments. It's not the existence of debt, but how you handle it, that counts.
Frequently Asked Questions (FAQs)
Q1: How often should I check my credit score?
A1: You should check it at least once a month to stay informed and detect any errors early.
Q2: Will paying off my student loan help my score?
A2: Yes, making consistent on-time payments on any loan, including student loans, helps build your credit history and improves your score.
Q3: How long does negative information stay on my report?
A3: Most negative marks stay for up to 7 years, though bankruptcies can remain for up to 10 years.
Q4: Is it bad to have too many credit cards?
A4: Not necessarily. Having multiple cards can actually help your utilization rate, but only if you manage them responsibly.
Q5: Can I build credit without a credit card?
A5: Yes. Installment loans (like student or auto loans), rent reporting services, and secured credit cards are all ways to build credit without a traditional credit card.
Final Thoughts
Understanding how credit scores really work is your best defense against falling for myths that can hurt your financial goals. Stay informed, manage your credit responsibly, and don’t let these outdated beliefs keep you from building a strong credit profile.
