Credit Score Lies That Could Hurt Your Finances

Checking Your Credit Score

You’ve probably heard a dozen tips on how to improve your credit score—but how many of them are actually true? In a time where inflation is squeezing household budgets and interest rates are fluctuating, your credit score plays a bigger role than ever in your ability to borrow wisely. Still, a lot of myths are floating around that could do more harm than good. Here’s what you should stop believing right now.

Myth 1: Checking Your Credit Score Lowers It
Let’s get this straight—checking your own credit score doesn’t hurt it. When you check it yourself, it’s called a “soft inquiry.” That’s completely different from a “hard inquiry,” which happens when a lender pulls your credit during a loan application. Soft inquiries don’t affect your score at all. Keeping tabs on your score is actually a smart move and an important part of maintaining good personal finance habits.

Myth 2: Closing Old Credit Cards Is Always a Good Idea
Think closing a credit card you don’t use will help your score? Not so fast. When you close a card, your available credit decreases—and that can push your credit utilization rate higher, which could hurt your score. Unless the card charges high annual fees, it’s often better to leave it open. That unused card helps extend your credit history and keeps your utilization ratio low.

Myth 3: Your Job and Income Affect Your Credit Score
It’s easy to assume your income plays into your score, but it doesn’t. Lenders care about your income, sure—but your credit score is based on things like payment history, types of credit, and how much of your available credit you’re using. You can have a strong score on a modest income or a poor one even if you’re earning six figures. It all comes down to how you manage your credit.

Myth 4: You Only Have One Credit Score
Here’s the thing: you don’t have just one score. Different credit bureaus—Experian, Equifax, and TransUnion—each generate their own scores based on the data they have. On top of that, lenders may use different models like FICO or VantageScore depending on what kind of credit you’re applying for. That’s why it’s smart to check reports from all three bureaus to get the full picture.

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Myth 5: Carrying a Balance Helps Your Credit
No, carrying a balance doesn’t improve your score—it just costs you money. Some people think keeping a balance shows active use, but what really matters is using your card and paying it off in full each month. That shows you’re responsible and helps you avoid high interest charges. With the rising cost of living, paying interest unnecessarily is a hit you don’t need.

Myth 6: You Need Debt to Build Credit
Debt and credit are not the same thing. You don’t need to be in debt to build a healthy credit profile. Instead:

• Use a credit card regularly for small purchases
• Always pay the full amount on time
• Keep your credit utilization low

This strategy works whether you’re planning for startup funding trends or just managing daily expenses. Responsible credit use is what builds your score—not debt accumulation.

Myth 7: Paying Off Debt Removes It From Your Report
It’s a nice idea, but it’s not true. Paying off a debt doesn’t erase it—it stays on your report for years, and that’s actually good. A closed, fully paid account shows that you’ve handled credit well. That history helps boost your score and can be a big plus when the Federal Reserve rate decisions affect borrowing costs or when you’re trying to secure lower loan rates.

Conclusion
Credit score myths are stubborn, and it’s easy to fall into bad advice without realizing it. But as financial systems evolve and tools like AI in business and credit monitoring platforms become more accessible, you’ve got no excuse to stay in the dark. Whether you’re trying to build credit for a mortgage, manage loans, or simply make smarter money moves, understanding how your credit really works is a must. The more informed you are, the better positioned you’ll be to navigate changes in the global economy with confidence.