4 Credit Score Myths You Should Not Believe

Certain myths about credit scores are circulating around and believing them can do real damage to your personal credit. So what should you believe and what should you dismiss? On this post, we present the four  biggest credit score myths and the truth behind them.

Myth #1. You need to regularly carry a balance to boost your credit score.

This is one of the most persistent credit score myths — and it benefits credit card companies more than consumers.

Many people believe that if they pay their credit card off in full every month, they’re somehow “not using credit properly.” The thinking goes like this: if you don’t carry a balance, the credit bureaus won’t see activity, and your score won’t grow.

That’s not how credit scoring works.

Credit scoring models primarily look at utilization ratio — the percentage of your available credit that you are using. For example, if you have a $5,000 limit and your reported balance is $500, you are using 10% of your available credit. Lower utilization is generally viewed as less risky.

What matters is the balance that gets reported, not whether you pay interest.

If you charge purchases during the month and then pay the statement balance in full before the due date, the account still shows activity. The scoring models see that you’re using credit responsibly and repaying it as agreed. Carrying a balance beyond the due date does not give you bonus points. It simply costs you interest.

In fact, consistently carrying high balances — even if you pay on time — can hurt your score because your utilization ratio remains elevated.

Another reason this myth survives is confusion between “showing activity” and “carrying debt.” You do need activity on your accounts to build and maintain a credit profile. But activity simply means using the account periodically and making payments as agreed. It does not mean paying interest month after month.

A practical approach is simple:

• Use your card for normal expenses.

• Keep your utilization ideally below 30%, and lower if possible.

• Pay the statement balance in full whenever you can.

Building strong credit is about responsible usage and consistent repayment — not about keeping a balance just to prove you can.

 

Myth #2. Checking your own credit report can hurt your score.

This myth has discouraged a lot of people from monitoring their credit — which is unfortunate, because regularly checking your credit is one of the smartest habits you can develop.

The confusion comes from how credit inquiries work.

There are two types of inquiries: hard inquiries and soft inquiries.

A hard inquiry occurs when you apply for new credit — such as a credit card, auto loan, or mortgage. In that case, a lender pulls your credit report to evaluate your application. Hard inquiries can cause a small, temporary dip in your score because they signal that you are seeking new credit.

A soft inquiry, on the other hand, does not affect your score at all. This includes:

• Checking your own credit score

• Monitoring your credit through a service

• Prequalification checks

• Background or employment-related checks

When you pull your own credit report or check your score, it is recorded as a soft inquiry. It has zero negative impact on your credit score.

The reason this myth persists is that people hear “credit inquiry” and assume all inquiries are harmful. They are not.

In fact, avoiding your credit report out of fear can create bigger problems. Errors on credit reports are more common than many realize. Fraud, incorrect balances, outdated accounts, and reporting mistakes can all occur. If you’re not reviewing your credit periodically, you may not catch these issues until you’re applying for a loan — when timing matters most.

Another important nuance: when you’re rate-shopping for a mortgage or auto loan, most modern scoring models group multiple hard inquiries within a short time frame (often 14–45 days, depending on the model) as a single inquiry. That means comparing lenders responsibly does not usually damage your score the way people assume.

Monitoring your credit is not risky — it’s responsible.

Regularly reviewing your credit report helps you:

• Spot inaccuracies early

• Detect potential identity theft

• Understand how your financial behavior impacts your score

• Make informed borrowing decisions

The bottom line is simple: checking your own credit will not hurt your score. Ignoring it might.

 

Myth #3: You Should Close Unused Credit Card Accounts

At first glance, this sounds like good advice. If you’re not using a credit card, why keep it open?

Many people assume that closing unused accounts will simplify their finances and improve their credit score. In reality, closing an account can sometimes lower your score — especially if it’s an older account.

There are two major factors involved here: credit utilization and length of credit history.

When you close a credit card, you reduce your total available credit. That can increase your utilization ratio overnight. For example, if you have two credit cards with a combined limit of $10,000 and a balance of $2,000, you’re using 20% of your available credit. If you close one card with a $5,000 limit, your available credit drops to $5,000 — and now that same $2,000 balance represents 40% utilization. That higher percentage can negatively impact your score.

The second factor is credit history length. Older accounts help establish a longer average age of credit, which scoring models view as a sign of stability. Closing a long-standing account may reduce the overall age of your credit profile over time.

That doesn’t mean you should keep every unused card forever. There are situations where closing an account makes sense — for example, if the card carries a high annual fee or if keeping it open tempts you into unnecessary spending.

But closing accounts purely to “clean up” your credit profile can backfire.

A more strategic approach may be to:

• Keep older accounts open, especially if they have no annual fee.

• Use them occasionally for small purchases to keep them active.

• Pay the balance in full.

This keeps the account contributing positively to your credit history without creating additional debt.

Credit scoring models reward stability. Long-term accounts with on-time payment history are often an asset — even if they aren’t used frequently.

Before closing any account, it’s worth considering how it may affect your available credit and overall credit profile. In many cases, keeping a dormant account open can do more good than harm.

Myth #4: Having Multiple Credit Cards Automatically Improves Your Credit Score

Some people believe that the more credit cards you have, the better your credit score will be. The logic sounds simple: more accounts equal more credit history, which should boost your score.

But credit scoring doesn’t work that way.

It’s not the number of cards that matters — it’s how you manage them.

Opening multiple credit cards in a short period can actually lower your score temporarily. Each new application may trigger a hard inquiry, and newer accounts reduce your average age of credit. Both factors can have a short-term impact.

There’s also a behavioral risk. More cards can make it easier to overspend, which can drive up utilization ratios. High balances across several cards can hurt your score far more than having just one or two accounts that are managed responsibly.

Credit scoring models generally reward:

• On-time payment history

• Low utilization relative to available credit

• Stability and longevity of accounts

• Responsible management of different types of credit

Having multiple cards can help if they increase your available credit and lower your overall utilization — but only if balances are kept low and payments are made consistently.

For example, someone with three well-managed credit cards, low balances, and years of on-time payments may have an excellent score. Someone else with six recently opened cards and high balances may see their score decline.

More accounts do not equal better credit. Responsible usage does.

In many cases, a small number of well-maintained accounts is more powerful than a wallet full of cards opened in pursuit of a higher score.

The focus should not be on accumulating accounts. It should be on demonstrating consistent, predictable repayment behavior over time.

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updated 3/2/2026