Paying off debt instantly gives you a perfect credit score.
Your credit score might seem like a mysterious number that fluctuates based on decisions you don’t fully understand. Plenty of well-meaning advice gets passed around, but some of it is complete nonsense. If you’ve ever been told that checking your credit hurts your score or that you can boost it overnight by wiping out all your debt, you’re not alone. These myths not only create confusion but could be holding you back from improving your financial standing.
Believing the wrong information about credit scores can lead to costly mistakes. Some myths make people fearful of taking necessary actions, while others give false hope that a few quick fixes will turn things around. Understanding how credit really works is the key to making smarter financial decisions. It’s time to set the record straight and debunk some of the worst credit score myths that just won’t die.
1. Checking your own credit score will hurt it.
One of the most persistent credit myths is that checking your own score will make it drop, according to Achieve. That’s simply not true. There are two types of credit checks—hard inquiries and soft inquiries. A hard inquiry happens when a lender pulls your credit report to approve you for a loan or credit card, which can temporarily lower your score. But when you check your own credit, it’s considered a soft inquiry and has absolutely no impact.
Regularly checking your credit report is actually one of the smartest financial habits you can develop. It helps you catch errors, monitor your progress, and spot signs of fraud before they become a serious problem. Ignoring your credit out of fear of hurting your score only puts you at a disadvantage. If you haven’t checked yours in a while, it’s time to start keeping tabs on it.
2. Closing old credit cards will improve your score.
It might seem logical that shutting down unused credit cards would clean up your financial profile, but doing so can actually backfire. One major factor in your credit score is the length of your credit history, as stated by Bankrate. If you close an old account, especially one you’ve had for years, you shorten your overall credit age, which can cause your score to drop.
Another issue is your credit utilization ratio—the amount of credit you’re using compared to your total available credit. If you close a card with a high limit, your total available credit shrinks, making your existing balances take up a bigger percentage of your limit. That increase in utilization can negatively impact your score. Unless a card has high fees or is tempting you into unnecessary spending, keeping old accounts open is usually the smarter move.
3. You need to carry a credit card balance to build your score.
The idea that carrying a balance helps your credit score is one of the most costly myths out there, as reported by My Fico. Interest charges can add up quickly, and there’s absolutely no benefit to letting debt linger. Your credit utilization—how much of your available credit you’re using—does play a role in your score, but the best way to manage it is by keeping your balances low, not by leaving debt on your card.
Paying off your credit card in full each month is the best strategy. It shows lenders that you’re responsible and can manage credit without relying on debt. Plus, avoiding interest charges keeps more money in your pocket. There’s no reason to hand over extra cash to credit card companies in the name of boosting your score when smarter habits can get you there without the unnecessary cost.
4. Your income affects your credit score.
Many people assume that making more money automatically leads to a better credit score, but that’s not how it works. Credit scores don’t take income into account at all. Instead, they focus on factors like your payment history, credit utilization, length of credit history, new accounts, and credit mix. You could have a six-figure salary and still have a terrible score if you’re mismanaging your credit.
Lenders do care about your income when deciding whether to approve you for a loan, but it’s not factored into your credit score calculation. That’s why someone with a modest income but excellent credit habits can have a much higher score than someone making twice as much but constantly missing payments. Building and maintaining good credit is about responsible financial behavior, not how much money you earn.
5. All debt is bad for your credit score.
Debt gets a bad reputation, but not all debt is harmful to your credit. In fact, having different types of credit—such as credit cards, car loans, or mortgages—can actually help your score. This is because credit scoring models reward borrowers who show they can manage various forms of credit responsibly.
The key is how you handle the debt. Carrying high balances, missing payments, or defaulting on loans will hurt your score, but making on-time payments and keeping your debt levels manageable can work in your favor. A well-balanced credit profile with different types of accounts, all in good standing, can signal to lenders that you’re a trustworthy borrower.
6. You can pay someone to fix your credit score overnight.
If someone promises to erase your bad credit history for a fee, run the other way. While there are legitimate credit repair services that help people dispute inaccuracies, no company can instantly erase negative marks or guarantee a perfect score. If you have late payments, high balances, or other legitimate negative items, the only way to fix them is through time and responsible financial habits.
The best way to improve your credit is to focus on paying bills on time, reducing debt, and keeping old accounts open. Quick-fix solutions often turn out to be scams that leave people worse off than before. Don’t waste money on promises that sound too good to be true—because they are.
7. Employers check your credit score when you apply for a job.
While some employers do look at credit reports, they don’t check your actual credit score. What they see is a modified version of your report that excludes certain personal information and your credit score itself. Employers typically review credit reports when hiring for jobs that involve financial responsibilities, but they’re more interested in overall financial behavior than a specific score.
If an employer does check your credit, they need your permission first. If you’re worried about what they’ll see, reviewing your report beforehand can help you address any errors or issues. A few late payments here and there probably won’t cost you a job, but serious financial mismanagement could raise concerns in certain industries.
8. Debit cards help build your credit score.
Using a debit card might be great for budgeting, but it won’t do anything for your credit score. Debit transactions don’t get reported to credit bureaus because they’re not considered a form of borrowing. Since your credit score is based on how well you manage credit, only loans and credit accounts contribute to it.
If you want to build credit, you’ll need to use a credit card responsibly or take out a loan and make on-time payments. Using a debit card wisely is still important for managing money, but if improving your credit score is your goal, it won’t move the needle.
9. A bad credit score lasts forever.
Your credit score isn’t set in stone. Even if you’ve made mistakes in the past, you can rebuild it over time. Negative marks like late payments or collections don’t disappear overnight, but they do have less impact as they age, especially if you establish better credit habits moving forward.
The key to improving your score is consistency. Making on-time payments, lowering your credit utilization, and avoiding new negative marks will gradually push your score upward. It takes patience, but a bad credit history doesn’t have to follow you forever.
10. Paying off a collection account removes it from your report.
Paying off a collection is a smart move, but it won’t erase the record from your credit report immediately. Most collections stay on your report for up to seven years, regardless of whether they’ve been paid. However, some newer scoring models do ignore paid collections, which can help improve your score faster.
Even though the record remains, paying it off is still the right choice. It prevents further damage, shows financial responsibility, and improves your chances of getting approved for credit in the future.
11. You only need a good credit score if you plan to borrow money.
Even if you never take out a loan, your credit score still matters. Landlords, insurance companies, and even utility providers sometimes check credit to determine rates or deposits. A strong score can mean lower insurance premiums, easier apartment approvals, and better financial opportunities overall.
Building good credit isn’t just about borrowing—it’s about creating financial flexibility. A high score keeps doors open, while a low score can create unnecessary hurdles.