Things People Believe About Credit Scores That Simply Aren't True
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In this article
From checking your own score to carrying a balance, widespread credit myths can cost you. Here's what the evidence actually shows.
Key Takeaways
- Checking your own credit score never lowers it — only hard inquiries from lenders do.
- Carrying a credit card balance does not help your score; it just costs you interest.
- Closing old accounts can actually hurt your score by reducing available credit history.
- Your income is not a factor in any standard credit score calculation.
- Multiple rate-shopping inquiries for mortgages or auto loans are typically counted as one.
Why Credit Myths Are So Persistent
Credit scores shape decisions that touch nearly every area of financial life — from qualifying for a mortgage to setting security deposit amounts on apartments. Yet a surprising number of widely repeated beliefs about how scores work are simply wrong. Acting on bad information can lead to unnecessary fees, higher interest rates, or missed opportunities to build credit efficiently.
To understand what your score actually measures, see our guide to what credit scores really calculate. The myths below are among the most common — and the most consequential.
Myth
Checking your own credit score will lower it.
Fact
Viewing your own score is a 'soft inquiry' and has no effect on your credit score whatsoever.
Credit inquiries fall into two categories. A hard inquiry occurs when a lender pulls your report to evaluate a credit application — this can cause a small, temporary dip in your score. A soft inquiry occurs when you check your own report, or when a lender pre-screens you for an offer. Soft inquiries are invisible to scoring models. Monitoring your own score regularly is actually a good financial habit, not a risk. You're entitled to free weekly credit reports from each of the three major bureaus at AnnualCreditReport.com.
Myth
Carrying a small balance on your credit card each month helps build your score.
Fact
Carrying a balance has no scoring benefit and simply costs you interest charges.
This myth likely stems from a misunderstanding of credit utilization. Scoring models do reward having active, used accounts — but they measure your reported balance relative to your credit limit, not whether you pay in full. Paying your statement balance in full each month keeps utilization low, avoids interest, and signals responsible use. Deliberately carrying a balance month to month only costs money without providing any credit-building advantage.
Myth
Closing a credit card you don't use will improve your score.
Fact
Closing an account typically reduces your available credit and can raise your utilization ratio, which may lower your score.
When you close a credit card, two things can happen. First, your total available credit drops, which increases your credit utilization ratio if you carry any balances elsewhere. Second, if the card is one of your oldest accounts, closure can eventually shorten your average account age — another factor in your score. There are valid reasons to close an account (high annual fees, financial simplification), but doing it to 'clean up' your credit profile often backfires. If a card has no fee and you can manage it responsibly, keeping it open and occasionally active is usually the better move for your score.
Myth
Your income directly affects your credit score.
Fact
Income is not a factor in any standard credit score model, including FICO and VantageScore.
Standard credit scores are calculated from data in your credit report, which tracks borrowing and repayment behavior — not earnings. Income, employment status, and net worth are not part of that file. Lenders may consider income separately when evaluating a loan application (as part of a debt-to-income ratio), but that calculation is distinct from your credit score. This means a high earner with poor repayment habits can have a low score, while someone with a modest income but a consistent payment history can have an excellent one.
Myth
Multiple credit inquiries always hurt your score, so you should only apply to one lender at a time.
Fact
Rate-shopping inquiries for mortgages, auto loans, and student loans are grouped into a single inquiry within a short window — typically 14 to 45 days.
Credit scoring models are designed to distinguish between someone taking on multiple new debts and someone comparison shopping for a single loan. When you apply to several mortgage lenders within a condensed period, most models treat those as one inquiry. The exact window varies by scoring model — FICO generally uses 45 days for mortgage and auto inquiries. This means you can and should shop around for the most favorable loan terms without worrying that each application is compounding score damage. Applying to five lenders for a car loan in one week typically costs no more than applying to one.
Myth
A thin credit file and bad credit are the same problem.
Fact
Having little credit history is a separate situation from having damaged credit, and the solutions differ.
Someone with no credit history hasn't demonstrated poor financial behavior — they simply haven't had the opportunity to build a record. Bad credit, by contrast, reflects negative events such as missed payments, collections, or defaults. The distinction matters because the paths forward are different. Our article on thin credit files vs. bad credit explains what separates these two situations and what options exist for each.
What These Corrections Mean for Your Financial Habits
Taken together, these corrections point toward a straightforward strategy: pay on time, keep balances low relative to your credit limits, and avoid unnecessary account closures or credit applications. None of that requires carrying debt or avoiding your own credit report.
Credit utilization — the share of your available revolving credit that you're currently using — deserves particular attention. It's one of the most moveable factors in your score and one of the most misunderstood. Our article on credit utilization and how it affects your score walks through exactly how that ratio works and what thresholds matter.
It's also worth knowing that some behaviors can quietly damage a score without the account holder realizing it. Common credit mistakes that hurt your score covers co-signing risks, card closure timing, and application frequency in detail. And if you haven't reviewed your full credit report recently, our walkthrough of how to read a credit report makes that process much less daunting.
This article provides general financial education and is not personalized financial advice. For guidance specific to your situation, consider consulting a licensed financial counselor or credit specialist.
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Personal Finance Editorial Team
Personal Finance Editorial Team is the collective byline for our editorial team and contributor network. Articles published under this byline or an editorial pen name are researched, written, and reviewed according to our editorial standards for clarity, consistency, and independence before publication.
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