28 Common Credit Report and Credit Score Myths Debunked

There are many credit report and credit score myths all over the internet and also shared among family and friends. So many of these myths continue to pop up so I felt it warranted an article that quickly identifies and debunk these myths.

Here is a simplified list of 28 persistent credit report and score myths:

1. Checking your credit reports lowers your score. – False
2. You have to pay to access your credit reports annually. – False
3. Credit bureaus report people as having good or bad credit. – False
4. Your income impacts your credit score. – False
5. The credit bureaus are government agencies. – False
6. Credit reports are public information. – False
7. Credit is hard to establish. – False
8. Paying with cash helps credit scores. – False
9. Scores should be the same number for each report. – False
10. Debit cards, prepaid cards, or ATM cards help credit scores. – False
11. Education levels can affect credit scores. – False
12. There is only one credit score that lenders use. – False
13. Once your credit is bad, it’s impossible to fix it. – False
14. Paid off delinquent amounts are automatically removed from a credit report. – False
15. You’re not accountable to pay bills on time during a dispute. – False
16. Closing old accounts help your score. – False
17. The best way to improve credit scores is to pay off the balances entirely and close credit cards. – False
18. Closing revolving accounts improve your credit score. – False
19. Closing accounts with late payments will remove negative information in your report. – False
20. No debt means higher credit scores. – False
21. Credit repair companies will increase your credit score. – False
22. Married couples share the same credit report & score. – False
23. Divorce never impacts credit scores. – False
24. You should wait until you’re much older to start a credit history. – False
25. It’s better to carry a balance on credit cards to have higher credit scores. – False
26. My employer can see my credit score. – False
27. Employers use your credit score for job offers. – False
28. High credit scores mean you’re rich. – False

There’s a prevailing idea in personal finance circles that credit isn’t important and we shouldn’t focus our time and attention on them. I wish that were true. Although I can agree that indebtedness can lead to financial stress, credit is a fact of life in the US.

Without credit, it’s nearly impossible to rent an apartment or hookup utilities or get cellphone service. Fortunately, some things are changing but overhauling a system built on credit will take time. So it’s important that you understand as much as you can about credit reports and scores.

Learn more about credit reports and scores with our 12 FAQ on credit and 10 common credit score related question to ask yourself.

Now, it’s your turn. Do you have any other myths you’ve uncovered?