Key Takeaways
- Checking your own credit score never hurts your credit — it's a soft inquiry.
- Closing old credit cards can actually lower your score by reducing available credit.
- Carrying a balance month to month does not build credit and costs you interest.
- Multiple loan applications in a short window are typically counted as one hard inquiry.
- Income is not a factor in your credit score calculation at all.
Why Credit Myths Stick — and Why They Matter
Credit scores influence some of the most consequential financial decisions in a person's life — mortgage approvals, car loan rates, even apartment applications. Yet a surprising amount of conventional wisdom about how scores work is simply incorrect. Acting on bad information can quietly erode your score over months or years without you realizing the cause.
Before diving into the myths, it helps to understand what a score actually measures. If you're starting from scratch, our primer on what credit scores actually measure explains the fundamentals clearly. The myths below are among the most persistent — and the most costly.
Myth
Checking your own credit score will lower it.
Fact
Checking your own score is a 'soft inquiry' and has zero effect on your credit score.
There are two types of credit inquiries: hard and soft. A hard inquiry occurs when a lender pulls your report to make a lending decision — this can temporarily lower your score by a few points. A soft inquiry, which includes checking your own credit through any consumer service, does not affect your score at all. Avoiding self-checks out of fear actually works against you, since monitoring your report is one of the best ways to catch errors or fraud early.
Myth
Closing old or unused credit cards is good for your score.
Fact
Closing old accounts can hurt your score by reducing your total available credit and shortening your credit history.
Two important scoring factors are your credit utilization ratio (the percentage of available credit you're using) and the length of your credit history. Closing an old card removes that card's credit limit from your available total, which raises your utilization ratio — and a higher ratio signals more risk to lenders. Older accounts also contribute positively to your average account age. In most cases, keeping an unused card open (with no annual fee) is better for your score than closing it.
Myth
Carrying a small balance on your credit card builds credit faster.
Fact
You do not need to carry a balance to build credit — paying in full each month is better and costs you nothing in interest.
This myth likely originated from a misunderstanding of how credit activity is reported. Lenders report your account status — whether you pay on time, what your balance is — regardless of whether you pay in full or carry a balance forward. Carrying a balance doesn't demonstrate creditworthiness; it just generates interest charges for you and profit for the card issuer. Paying your statement balance in full, on time, every month is the most straightforward path to a strong payment history.
Myth
Applying for multiple loans at once will seriously damage your score.
Fact
Rate-shopping for mortgages, auto loans, or student loans within a short window is typically treated as a single inquiry by most scoring models.
Major credit scoring models, including FICO, are designed to recognize when consumers are comparing rates for the same type of loan. Multiple hard inquiries for a mortgage or auto loan within a 14–45 day window (the window varies by scoring model version) are usually grouped and counted as one inquiry. This encourages informed shopping rather than penalizing it. The same grouping does not apply to credit card applications, where each application typically counts separately.
Myth
Your income affects your credit score.
Fact
Income is not a factor in any standard credit scoring model, including FICO and VantageScore.
Credit scores are calculated from information in your credit report — payment history, amounts owed, length of credit history, new credit, and credit mix. Income doesn't appear on a credit report and is not factored into any score. A high earner with a history of missed payments will have a lower score than a modest earner with a spotless payment record. Lenders may separately consider income when making lending decisions (as part of debt-to-income calculations), but that's distinct from the score itself.
Myth
You only have one credit score.
Fact
You have many credit scores, calculated by different models, bureaus, and versions — they often differ from one another.
FICO alone has dozens of score versions, and VantageScore offers its own family of models. Each of the three major credit bureaus — Equifax, Experian, and TransUnion — may hold slightly different information, which leads to different score outputs. The score you see through a free consumer app may also differ from what a specific lender pulls when you apply for credit, because lenders often use industry-specific models. Understanding this helps set realistic expectations when you're monitoring your credit health.
What These Myths Have in Common
Most credit myths share a common thread: they sound logical on the surface but misunderstand how the underlying scoring models actually work. The result is that well-intentioned behavior — paying off a card and closing it, avoiding new accounts entirely, or deliberately carrying a small balance — can work against you.
35%
Portion of FICO score tied to payment history
Payment history is the single largest factor in a standard FICO score, according to FICO's published scoring criteria.
30%
Portion of FICO score tied to amounts owed
Credit utilization — how much of your available credit you're using — makes up roughly 30% of a standard FICO score.
3
Major credit bureaus reporting your data
Equifax, Experian, and TransUnion each maintain independent files, which means your scores can differ across bureaus.
Credit utilization is one area where misunderstandings are especially expensive. Our article on how credit utilization shapes your score walks through how the ratio is calculated and what you can do to keep it in a range that helps rather than hurts.
Don't Let Myths Drive Real Decisions
Acting on credit misconceptions — like closing old accounts before a major loan application — can have consequences that take months to reverse. Before making any significant change to your credit accounts, it's worth understanding exactly how that action will interact with your score. When in doubt, consult a nonprofit credit counselor or a licensed financial advisor who can review your specific situation.
When reviewing your score, always pair it with a look at your actual credit report. Our walkthrough on reading your credit report without getting lost in the jargon explains every section in plain language. And if you're working on your broader financial picture, budgeting myths that keep people from starting is worth a read alongside this one.
This article is for general informational and educational purposes only and does not constitute personalized financial or legal advice. For guidance specific to your situation, consult a qualified financial professional.