Things People Get Wrong About Credit Scores
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Key Takeaways
- Checking your own credit score is a soft inquiry and never lowers your score.
- Closing an old credit card can actually hurt your score by reducing available credit and shortening history.
- Carrying a balance month to month does not build credit — paying on time does.
- A higher income has no direct effect on your credit score calculation.
- All three major credit bureaus may hold different information, so one score isn't the whole picture.
Why Credit Score Myths Persist
Credit scores sit at the center of some of the most consequential financial decisions people make — buying a home, financing a car, qualifying for a credit card with reasonable terms. Yet much of what circulates as common knowledge about how scores work is either oversimplified or flat-out wrong.
Some myths come from outdated rules that have since changed. Others are logical-sounding guesses that happen to be incorrect. A few get passed down as advice from well-meaning people who were themselves misinformed. Whatever the source, acting on bad information can cost you — either in a lower score than you deserve or in unnecessary anxiety about things that don't actually matter.
For a grounding in how scores are actually calculated, see the five factors that shape your credit score. What follows covers the misconceptions that come up most often.
Myth
Checking your own credit score will lower it.
Fact
Checking your own score is a "soft inquiry" and has no effect on your credit score whatsoever.
Credit inquiries come in two types. A hard inquiry occurs when a lender pulls your credit as part of an application — for a loan, credit card, or mortgage. Hard inquiries can shave a few points off your score temporarily. A soft inquiry occurs when you check your own score, when a lender pre-screens you for an offer, or when an employer runs a background check. Soft inquiries never affect your score. Avoiding your own credit report out of fear of hurting it means missing errors, fraud, or outdated information that could be dragging your score down without your knowledge.
Myth
Closing a credit card you don't use will help your score.
Fact
Closing a card typically hurts your score in two ways: it reduces your total available credit and can shorten your credit history.
Two of the key scoring factors work against you when you close an account. First, your credit utilization ratio — the percentage of available credit you're using — rises immediately when you remove a card's credit limit from the equation. Keeping that ratio low (generally under 30%) tends to help your score. Second, the age of your accounts matters. Closing an older card can reduce your average account age over time. How credit history length influences your financial profile explains why this is one of the less obvious ways a seemingly responsible move can backfire.
Myth
You need to carry a balance to build credit.
Fact
Paying your balance in full each month builds credit just as effectively — and saves you money on interest.
This myth may stem from a misunderstanding of what credit scoring actually measures. Scoring models reward on-time payments, not interest payments. When you carry a balance, you pay interest to the card issuer — that doesn't benefit your score in any way. What matters is that you use the card and pay at least the minimum on time. Paying the full balance is the better financial habit: same credit-building effect, zero interest charges. Credit utilisation is also affected by your balance at statement time, so carrying a large balance can hurt even if you always pay on time.
Myth
Your income directly affects your credit score.
Fact
Income is not a factor in any major credit scoring model. Your score reflects borrowing and repayment behavior, not earnings.
It's reasonable to assume that earning more makes you a better credit risk — and lenders may consider income when making approval decisions — but income does not appear in your credit report and is not part of your score calculation. A high earner who pays late will have a lower score than a modest earner with a spotless payment record. The factors that do count include payment history, amounts owed, length of credit history, credit mix, and new credit inquiries. For a detailed breakdown, see what a credit score actually means.
Myth
There is one single credit score that all lenders see.
Fact
There are multiple scoring models and three separate credit bureaus, so different lenders may see meaningfully different numbers.
FICO alone has dozens of score versions, and VantageScore is a separate competing model used by many lenders and consumer-facing tools. On top of that, the three major credit bureaus — Equifax, Experian, and TransUnion — each compile their own reports independently. If a creditor only reports to two of the three, the bureau that's missing that data may generate a different score. A score you see on a free app may use a different model than the one a mortgage lender pulls. None of this means your efforts are wasted — the same underlying habits improve scores across all models — but it does mean a single number isn't the complete picture.
What These Myths Have in Common
Most credit score myths share a structural problem: they treat credit scoring as a black box, then fill in the gaps with intuition. Intuition is useful in many areas of life, but credit scoring follows specific mathematical rules — and those rules don't always match what feels logical.
The good news is that the underlying system rewards straightforward behavior: pay what you owe on time, don't use all the credit available to you, and keep your oldest accounts open when possible. Building credit responsibly doesn't require gaming a system — it requires understanding how the system actually works.
1 in 5
Americans with errors on their credit report
According to a Federal Trade Commission study, roughly one in five consumers had an error on at least one of their three credit reports.
35%
Of your FICO score tied to payment history
Payment history is the single largest factor in the standard FICO scoring model, making on-time payments the highest-leverage habit to develop.
Your credit report is the raw data that feeds your score. Reviewing it regularly — ideally from all three bureaus — is one of the most practical steps you can take. Reading your credit report without getting lost walks through each section so you know what you're looking at and what to flag.
This article is for general informational and educational purposes only. It does not constitute personalized financial or legal advice. Consult a qualified financial professional for guidance specific to your situation.
The content on this site is for informational purposes only and is not a substitute for professional advice. Always consult a qualified professional for guidance specific to your situation.