Let’s be honest—credit scores are confusing. With so much advice floating around, it’s hard to know what’s true and what’s complete nonsense.
You’ve probably heard things like:
💭 “Checking your own credit score will lower it.”
💭 “You need to carry a balance on your credit card to build credit.”
💭 “Closing old accounts helps your score.”
🚨 Spoiler alert: All of these are myths! 🚨
In this guide, we’re busting the biggest credit score myths and giving you real strategies that actually work to improve your score.
🚫 Myth #1: Checking Your Own Credit Score Hurts Your Score
🔎 The Truth: Checking your credit score does NOT lower your score.
There are two types of credit inquiries:
✔ Soft Inquiry – When YOU check your own credit (or when lenders pre-approve you). This does NOT affect your score.
✔ Hard Inquiry – When you apply for a credit card or loan. This can lower your score slightly (usually by a few points).
💡 Pro Tip:
- Use free credit monitoring tools like Credit Karma or Experian to check your score anytime without affecting it.
- If you’re applying for a loan, multiple inquiries for the same type of loan (like a mortgage or auto loan) within 14–45 days only count as ONE hard inquiry!
🚫 Myth #2: You Need to Carry a Credit Card Balance to Build Credit
💳 The Truth: You DO NOT need to carry a balance to build credit.
This myth costs people money in unnecessary interest payments. As long as you use your credit card and pay it off on time, you’re building positive payment history—which is 35% of your credit score!
💡 Pro Tip:
- Pay your balance in full every month to avoid interest.
- If you want your credit card to report some activity, leave a small balance ($5-$10) until after the statement closes, then pay it off.
🔗 Need help picking the best credit card? Check out NerdWallet’s Best Credit Cards for cashback, travel, and credit-building options.
🚫 Myth #3: Closing Old Credit Accounts Helps Your Score
📉 The Truth: Closing old credit accounts can actually HURT your score.
Your credit history length (15% of your score) depends on how long you’ve had accounts open. Closing old accounts shortens your credit history and can lower your score.
💡 Pro Tip:
✔ If a credit card has no annual fee, keep it open to maintain your credit history.
✔ If you must close a card (due to high fees), consider downgrading it to a no-fee version instead of canceling it.
🔗 Need to downgrade a card? Call your bank and ask if they offer a product change to a no-annual-fee version.
🚫 Myth #4: Paying Off a Loan Always Increases Your Score
🏦 The Truth: Paying off a loan can sometimes lower your score temporarily.
Here’s why:
- You lose an active account, which means fewer positive payments being reported.
- Your credit mix may shrink if you don’t have other installment loans.
💡 Pro Tip:
✔ If you’re close to paying off a loan, consider opening a credit-builder loan to keep positive activity on your report.
✔ If you have no active loans, a small personal loan or secured loan can help maintain credit diversity.
🔗 Check out Self Credit-Builder Loans to keep your credit active after paying off debt.
🚫 Myth #5: You Should Avoid Credit Cards to Protect Your Credit Score
💳 The Truth: Avoiding credit cards can actually make it harder to build credit.
Credit cards help with:
✔ Payment history (35% of your score)
✔ Credit utilization (30% of your score)
✔ Credit mix (10% of your score)
💡 Pro Tip:
- If you’re new to credit, start with a secured credit card (Discover it® Secured is a great option).
- Use your card for small purchases (like Netflix or gas) and pay it off every month.
🚫 Myth #6: All Debts Are Treated the Same on Your Credit Report
📊 The Truth: Different types of debt affect your score differently.
Credit Card Debt (Revolving Credit)
- High balances hurt your score because they increase your credit utilization ratio.
- Keeping utilization under 10% is best.
Installment Loans (Mortgages, Auto Loans, Personal Loans)
- As long as you pay on time, these debts help your score.
- Paying them off can lower your score slightly if it reduces your credit mix.
💡 Pro Tip:
- If you’re paying down credit card debt, focus on keeping your utilization low across all your cards (not just one).
- For loans, keep making on-time payments until you’re ready to pay them off completely.
🔗 Need a strategy to pay off debt? Try the snowball vs. avalanche method.
🚫 Myth #7: You Can’t Remove Negative Items from Your Credit Report
📉 The Truth: You CAN remove some negative marks from your credit report—but only if done correctly.
✔ Errors & fraudulent accounts? Dispute them with the credit bureaus.
✔ Late payments? Request a goodwill adjustment from the lender.
✔ Collections? Negotiate pay-for-delete agreements with collection agencies.
💡 Pro Tip: Disputing errors is the fastest way to improve your score.
🔗 How to remove negative items? Check out our full guide on credit report disputes.
Final Thoughts: What Actually Works for a Better Credit Score?
🚀 Forget the myths—here’s what actually helps your credit score:
✔ Pay every bill on time (set up autopay!).
✔ Keep credit utilization under 10% (or use the Two-Payment Trick).
✔ Don’t close old credit accounts (they help your credit history).
✔ Use a mix of credit types (credit cards + loans).
✔ Check your credit report regularly and dispute errors if needed.
🎯 Bottom line? Building and maintaining a great credit score is simple—but only if you follow the right strategies, not the myths.
💬 Have questions or need help? Drop a comment—I’d love to chat!
