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28 Credit Score Myths Debunked and Explained

Let's debunk some common credit score myths that are holding you back and affecting your credit health.

There are many credit score myths on the internet and shared among family and friends. As these myths continue to pop up, I felt it warranted an article that quickly identifies and debunks them.

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

1. Checking your credit reports lowers your score.

Checking your own credit report, known as a soft inquiry, does not impact your credit score. Only when lenders or creditors pull your credit report for a credit application (hard inquiry) can it affect your score.

2. You have to pay to access your credit reports annually.

You can access your free credit reports once a year from each of the three major credit bureaus (Equifax, Experian, TransUnion) through, as mandated by federal law.

3. Credit bureaus report people as having good or bad credit.

Credit bureaus simply report your credit history and provide credit scores based on that information. They don’t categorize individuals as having good or bad credit.

4. Your income impacts your credit score.

Your income is not included in your credit report and does not directly impact your credit score. Credit scores are based on factors such as payment history, credit utilization, length of credit history, types of credit, and new credit.

5. The credit bureaus are government agencies.

Credit bureaus are private companies that collect and maintain credit information on individuals. They are not government agencies.

6. Credit reports are public information.

Credit reports contain sensitive financial information and are not public records. They are only accessible to those with a legitimate need, such as lenders, landlords, and employers you’ve given your permission.

7. Credit is hard to establish.

While establishing credit may require some effort, it’s not necessarily difficult. Secured credit cards, student loans, and credit-builder loans are among the options available for individuals looking to establish credit.

8. Paying with cash helps credit scores.

Payment methods such as cash transactions do not impact your credit score, as they are not reported to the credit bureaus. Credit scores are based on credit-related activities like loan payments and credit card usage.

9. Scores are the same number for each report.

Each of the three major credit bureaus may have slightly different information and scoring models, resulting in variations in credit scores between reports.

10. Debit cards, prepaid cards, or ATM cards help credit scores.

Debit cards, prepaid cards, and ATM cards are not credit instruments and do not contribute to your credit history or credit score.

11. Education levels can affect credit scores.

Education level is not a factor in determining credit scores. Credit scores are based on credit-related activities and financial behaviors, not educational attainment.

12. There is only one credit score that lenders use.

Lenders use multiple credit scoring models, such as FICO® Score and VantageScore. Additionally, each credit bureau may use different versions of these scoring models, resulting in variations in credit scores.

13. Once your credit is bad, it’s impossible to fix it.

While rebuilding credit may take time and effort, it is possible to improve credit scores over time through responsible financial habits, such as making on-time payments, reducing debt, and establishing a positive credit history.

14. Paid off delinquent amounts are automatically removed from a credit report.

Paid-off delinquent accounts may still appear on your credit report, typically for seven years from the delinquency date. However, the status of the account may be updated to “paid,” which can positively impact your credit score.

15. You’re not required to pay bills on time during a dispute.

You are still responsible for making timely payments on bills, even if you are disputing them. Failure to pay bills on time can result in late payment fees, penalties, and negative impacts on your credit score.

16. Closing old accounts helps your score.

Closing old accounts can negatively impact your credit score, especially if they have a long history of on-time payments. Closing accounts reduces your available credit and shortens your credit history, which can lower your score.

17. Improve credit scores by paying balances entirely and close credit cards.

While paying off balances can have a positive impact on your credit score by reducing your credit utilization ratio, closing credit cards can harm your score by reducing your available credit. It’s generally better to keep accounts open and maintain a low balance.

18. Closing revolving accounts improves your credit score.

Closing revolving accounts, such as credit cards, can lower your credit score by reducing your available credit and increasing your credit utilization ratio. Keeping revolving accounts open is generally advisable, especially if they have a positive payment history.

19. Closing accounts with late payments will remove negative information.

Closing accounts with late payments does not remove the negative mark from your credit report. Late payments typically remain on your credit report for seven years from the missed payment date.

20. No debt means higher credit scores.

While having no debt may be financially beneficial, it does not necessarily result in higher credit scores. Credit scores are based on various factors, including payment history, credit utilization, length of credit history, and types of credit.

21. Credit repair companies will increase your credit score.

Credit repair companies cannot guarantee to increase your credit score. While they may help you dispute inaccuracies on your credit report, improving your credit score ultimately depends on your financial habits and responsible credit management.

22. Married couples share the same credit report & score.

Married couples do not share a credit report or credit score. Each individual has their credit report and credit score, based on their credit history and financial behavior.

23. Divorce never impacts credit scores.

Divorce can impact credit scores, especially if joint accounts are involved. If joint accounts are not managed properly post-divorce, late payments or defaults can negatively affect both parties’ credit scores.

24. You should wait until you’re older to start a credit history.

It is beneficial to start building credit as soon as possible, regardless of age. Establishing a positive credit history early on can lead to better credit opportunities in the future, such as lower interest rates on loans and credit cards.

25. It’s best to carry credit card balances for higher credit scores.

Carrying a balance on credit cards does not improve credit scores. In fact, it can lead to higher credit utilization, which can negatively impact your score. Paying off credit card balances in full and on time is a better strategy for maintaining and improving credit scores.

26. My employer can see my credit score.

In most cases, employers cannot access your credit score without your permission. They may, however, request a copy of your credit report as part of the hiring process with your consent.

27. Employers use your credit score for job offers.

While some employers may check credit reports as part of the hiring process, they do not use credit scores as the sole determinant for job offers. Credit checks are more common for positions that involve financial responsibilities or require a security clearance.

28. High credit scores mean you’re rich.

Credit scores are based on credit-related factors and do not reflect an individual’s wealth or income level. It is possible to have a high credit score regardless of income as long as you manage credit responsibly and make timely payments.

Why Credit Scores Are Important?

There’s a prevailing idea in personal finance circles that credit isn’t important and we shouldn’t focus our time and attention on it. 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, hook up 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.

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

Jason Vitug

Jason Vitug is a bestselling author, entrepreneur, and founder of and His purpose to help others live their best lives through experiential and purposeful living. Jason is also a certified yoga teacher and breathwork specialist and has traveled to over 40 countries.

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