7 Credit Myths That Could Be Hurting Your Score

Credit scores are often misunderstood, thanks to the many myths floating around. Believing these misconceptions can stop you from reaching your financial goals. Let’s debunk seven common credit myths and set the record straight so you can build and maintain a stellar credit score.

1. Myth: Checking Your Credit Score Hurts It

Truth: Checking your own credit score is considered a soft inquiry and does not affect your credit. Only hard inquiries, like applying for a loan or credit card, can temporarily impact your score.

2. Myth: Carrying a Balance Improves Your Score

Truth: You don’t need to carry a balance to build credit. Paying your full balance every month avoids interest charges and keeps your utilization low—two key factors for a healthy score.

3. Myth: Closing Old Credit Cards Helps Your Score

Truth: Closing an old credit card can actually hurt your score by reducing your credit history length and overall available credit. If the card has no annual fee, it’s better to keep it open.

4. Myth: You Only Need a Good Credit Score When Applying for a Loan

Truth: Your credit score can affect more than just loans. Landlords, insurance companies, and even employers may check your credit to assess risk or reliability. A good score is essential for many aspects of life.

5. Myth: One Late Payment Won’t Make a Difference

Truth: Even a single late payment can cause a significant drop in your score, especially if it’s 30 days past due. Always pay at least the minimum by the due date to avoid this.

6. Myth: Debit Cards Help Build Credit

Truth: Debit cards don’t affect your credit because they’re not tied to borrowed money. To build credit, you need to use credit products like credit cards, loans, or lines of credit responsibly.

7. Myth: Checking Your Report for Errors is Pointless

Truth: Errors on credit reports are more common than you think and can drag down your score. Reviewing your report regularly and disputing inaccuracies is a crucial step in maintaining good credit.

Final Thoughts

Believing credit myths can hold you back from reaching your financial potential. By understanding how credit really works and focusing on proven strategies, you can take control of your score and your financial future. Don’t let myths dictate your credit—take charge and build the score you deserve! 💪💳