Most people believe at least one credit score myth. These misconceptions can cost you points — and money. Here’s the truth.
Quick Myth vs. Fact
| # | Myth | Truth |
|---|---|---|
| 1 | Checking your score lowers it | Soft inquiries have zero impact |
| 2 | Carrying a balance helps your score | It only costs you interest |
| 3 | Closing cards improves your score | It usually hurts it |
| 4 | Income affects your credit score | Income isn’t in your credit report |
| 5 | You only have one credit score | You have dozens of different scores |
| 6 | Paying off debt removes it from your report | Closed accounts stay for up to 10 years |
| 7 | Debit cards build credit | They don’t — they’re not reported |
| 8 | You need debt to have good credit | You can have excellent credit with $0 balance |
| 9 | All debt is equal | Credit cards hurt more than mortgages at same balance |
| 10 | Married couples share a credit score | Each person always has their own score |
| 11 | Employers see your credit score | They see a modified credit report, not your score |
| 12 | Settling debt has no impact | “Settled” is worse than “Paid in Full” |
| 13 | Old negative items hurt just as much | Impact fades significantly over time |
| 14 | Credit repair companies can fix anything | They can’t remove accurate information |
| 15 | You start with a credit score of zero | Scores range from 300-850; there’s no score until you build history |
Myth 1: Checking Your Credit Score Lowers It
Truth: Checking your own score has zero impact.
| Type of Check | Impact |
|---|---|
| You check your own score | None (soft inquiry) |
| Credit Karma, bank apps | None (soft inquiry) |
| Employer background check | None (soft inquiry) |
| Applying for new credit | -5 to -10 points (hard inquiry) |
Check your score as often as you want. Only applying for credit generates a hard inquiry.
Myth 2: Carrying a Balance Helps Your Score
Truth: Paying in full every month is better.
| Strategy | Effect on Score | Cost to You |
|---|---|---|
| Pay in full monthly | Best | $0 interest |
| Carry a small balance | Same or worse | Pays interest |
| Carry a large balance | Worse (high utilization) | Significant interest |
Your score benefits from low utilization, not from carrying a balance. A $0 statement balance after full payment still reports positive history.
Myth 3: Closing Old Cards Improves Your Score
Truth: Closing cards usually lowers your score.
| What Happens When You Close | Score Impact |
|---|---|
| Available credit decreases | Utilization ratio goes up |
| Average account age may drop | Credit history appears shorter |
| Credit mix may change | One less revolving account |
Keep old cards open with a small recurring charge to maintain the benefits.
Myth 4: Income Affects Your Credit Score
Truth: Income is not a factor in any credit scoring model.
| In Your Credit Score | Not In Your Credit Score |
|---|---|
| Payment history | Income |
| Credit utilization | Savings/checking balance |
| Length of history | Employment status |
| Credit mix | Net worth |
| New credit inquiries | Education level |
Someone earning $30,000 can have a higher credit score than someone earning $300,000. It’s about how you manage credit, not how much you earn.
Myth 5: You Only Have One Credit Score
Truth: You have dozens of credit scores.
| Score Type | Versions |
|---|---|
| FICO Score | 8, 9, 10, 10T + industry-specific versions |
| VantageScore | 3.0, 4.0 |
| Bureau-specific | Each bureau may produce different scores |
| Industry scores | Auto, mortgage, credit card versions |
FICO alone has 28+ different scoring models. Your score varies depending on which model and bureau a lender uses.
Myth 6: Paying Off Debt Removes It from Your Report
Truth: Paid accounts stay on your report.
| Account Status | How Long It Stays |
|---|---|
| Paid, closed in good standing | 10 years after closing |
| Paid collection | 7 years from original delinquency |
| Paid, previously delinquent | 7 years from delinquency date |
| Active, in good standing | As long as account is open + 10 years |
Paying off debt changes the status to positive, but the account history remains on your report. That’s actually good — positive history helps your score.
Myth 7: Debit Cards Build Credit
Truth: Debit cards are not reported to credit bureaus.
| Builds Credit | Does Not Build Credit |
|---|---|
| Credit cards | Debit cards |
| Loans (auto, mortgage, student) | Prepaid cards |
| Credit-builder loans | Cash payments |
| Reported rent payments | Most bill payments |
Debit cards pull directly from your bank account — no credit is extended, so nothing is reported.
Myth 8: You Need Debt to Have Good Credit
Truth: You need credit accounts, not debt.
| What You Need | What You Don’t Need |
|---|---|
| Open credit card(s) | A balance |
| Responsible usage | Large purchases |
| On-time payments | Debt carried month to month |
Use a credit card for small purchases and pay the full balance monthly. You build excellent credit without ever paying interest.
Myth 9: All Debt Affects Your Score Equally
Truth: Revolving debt (credit cards) impacts your score more than installment debt.
| Debt Type | Score Impact of High Balance |
|---|---|
| Credit cards (revolving) | High — utilization is 30% of score |
| Mortgage (installment) | Low — expected and gradual |
| Auto loan (installment) | Low — expected |
| Student loans (installment) | Low — expected |
Maxing out a credit card hurts far more than having a large mortgage balance.
Myth 10: Married Couples Share a Credit Score
Truth: Every person has their own credit score, always.
| Scenario | Credit Impact |
|---|---|
| Getting married | No change to either score |
| Joint credit card | Appears on both reports separately |
| Spouse has bad credit | Doesn’t affect your score directly |
| Joint mortgage application | Both scores are evaluated individually |
Marriage does not merge credit histories. However, joint accounts affect both holders’ reports.
Myth 11: Employers See Your Credit Score
Truth: Employers see a modified credit report, not your score.
| What Employers See | What They Don’t See |
|---|---|
| Account history | Your credit score number |
| Late payments | Your date of birth |
| Collections | Your account numbers (truncated) |
| Public records | Soft inquiries |
Employers need your written consent, and the report they see is a limited version. This practice is also banned in some states.
Myth 12: Settling Debt Is the Same as Paying It Off
Truth: “Settled” is worse than “Paid in Full” on your credit report.
| Status | How It Reports | Score Impact |
|---|---|---|
| Paid in Full | Best possible | Positive |
| Settled for Less | Shows “settled” | Negative |
| Unpaid | Worst | Most negative |
If possible, negotiate “paid in full” reporting when settling a debt.
Myth 13: Old Negative Items Hurt Just as Much
Truth: Negative item impact fades over time.
| Time Since Negative Event | Score Impact |
|---|---|
| 0-6 months | Maximum damage |
| 6-12 months | Still significant |
| 1-2 years | Noticeably less |
| 3-4 years | Much less |
| 5-6 years | Minimal |
| 7 years | Falls off report |
A late payment from 5 years ago hurts far less than one from 5 months ago.
Myth 14: Credit Repair Companies Can Fix Anything
Truth: No one can remove accurate negative information.
| What Credit Repair Can Do | What It Cannot Do |
|---|---|
| Dispute inaccurate items | Remove accurate late payments |
| Help organize disputes | Remove legitimate collections |
| Identify errors on reports | Erase bankruptcy records |
| Guide you through the process | Speed up the 7-year clock |
You can do everything a credit repair company does for free by disputing directly with the bureaus.
Myth 15: You Start with a Credit Score of Zero
Truth: There is no credit score of zero.
| Score Range | Fact |
|---|---|
| 300-850 | FICO and VantageScore range |
| Below 300 | Doesn’t exist |
| No score | “Credit invisible” — no score yet, not zero |
About 45 million Americans are “credit invisible” — they have no credit score because they have no credit file. The first score you generate will be somewhere in the 300-850 range.