What Are Common Credit Score Myths and the Truth Behind Them?
Credit scores affect interest rates, loan approvals, insurance pricing in some states, and even rental applications. Yet misinformation causes people to make choices that actually harm their scores. Below I debunk the most common myths I see in practice and show the correct actions to take.
Quick primer: how scores are built
Most mainstream scores (FICO and VantageScore variants) emphasize five broad areas: payment history, credit utilization, length of credit history, credit mix, and new credit. The commonly used FICO weightings are approximate: payment history ~35%, credit utilization ~30%, length of history ~15%, credit mix ~10%, and new credit ~10% (FICO). These are general rules — exact weights vary by score model and by the lender’s version of the model (source: FICO and VantageScore summaries).
Top myths and the real facts
1) Myth: Closing an old credit card will improve your score.
- Reality: Closing an older account often lowers your available credit and shortens average account age, which can raise your credit utilization ratio and reduce the length component of your score. Both effects can lower your score in the short to medium term.
- Action: If the card has no annual fee, leaving it open (and using it occasionally for a small recurring charge) is usually better. If you must close it, consider paying down other balances first.
2) Myth: Checking your own credit hurts your score.
- Reality: Self-checks are “soft inquiries” and do not affect credit scores or appear to lenders. Only “hard inquiries”—when a lender checks your report to make a lending decision—can affect your score (see section on inquiries below). Use free score checks and your credit reports regularly (AnnualCreditReport.com now provides free weekly reports from each bureau) (source: AnnualCreditReport.com, CFPB).
3) Myth: Carrying a small balance helps your score.
- Reality: You don’t need to carry a balance to build credit. On the contrary, carrying a balance increases interest charges and can raise your utilization rate. Paying your balance in full and keeping utilization low (aim below 30%, and for faster improvement, below 10–20%) is the efficient route to better scores (source: FICO, CFPB).
4) Myth: Paying off a collection removes it from your report immediately.
- Reality: Payment may not automatically remove a collection entry. Recent consumer reporting reforms led to better treatment of medical collections and removed many paid medical collections from credit files, but medical or non-medical collections can still appear if not handled properly. Paid collections may remain visible depending on how the furnisher reports the status. Dispute inaccuracies if you believe an item should be removed (source: CFPB guidance on medical debt and credit reporting).
5) Myth: All credit scoring models are the same.
- Reality: Lenders use different models and versions. A FICO score and a VantageScore can show different results for the same consumer. Lenders may use industry-specific scores (auto, mortgage) or older/newer model versions. Look at the type of score a lender requests if you want to estimate approval odds (see our explainer on score models) ([What Credit Score Models Lenders Use](
