Introduction

Credit scores matter: they influence mortgage rates, auto loans, insurance premiums, and sometimes job or rental decisions. But misinformation is widespread. In my work advising clients for more than a decade, I repeatedly see the same falsehoods derail good financial plans. This article debunks the most common credit score myths, explains why each is wrong, and gives practical, evidence-based actions you can take to improve or protect your score.

How credit scores are actually built

Before debunking myths, it helps to remember the main factors scoring models use. The most widely cited breakdown comes from FICO (commonly used by lenders): payment history (~35%), amounts owed or credit utilization (~30%), length of credit history (~15%), new credit (~10%), and credit mix (~10%) (myFICO). Different models (FICO vs VantageScore and their versions) weigh items slightly differently, but the broad categories are consistent. The Consumer Financial Protection Bureau also summarizes how scores are used and the difference between credit reports and scores (CFPB).

Debunked myths and the facts

Below are the myths I see most often, with short explanations and practical next steps.

1) “Checking my credit score will lower it.”

  • The fact: False. When you check your own credit score or review your credit report, that’s a soft inquiry and it does not affect your score. Only hard inquiries — those made by lenders when you apply for new credit — can temporarily lower scores. See the CFPB guidance on inquiries (CFPB).
  • Practical step: Check your reports regularly at least once a year via AnnualCreditReport.gov and use a reputable credit monitoring tool if you want more frequent alerts (AnnualCreditReport.gov).

2) “I need to carry a balance on my credit card to build credit.”

  • The fact: False. Carrying a balance does not boost your score. Paying your balance in full each month prevents interest charges and still benefits your score because on-time payments and low utilization are what matter. Credit utilization — the ratio of balances to available credit — is what impacts scores, not the presence of any balance itself (FICO). Aim to keep utilization under 30%, and ideally under 10% on individual cards and across all revolving accounts.
  • Practical step: If you want to demonstrate active but low usage, consider small recurring charges you pay each month and then pay in full. That activity shows responsible use without interest costs.

3) “Closing old or unused accounts will improve my score.”

  • The fact: Usually false. Closing an old account can reduce your available credit and shorten your average account age, both of which can lower your score. If an account has no fee and no fraud risk, keeping it open usually helps your score.
  • Practical step: Keep oldest, no-fee accounts open. If a card has an annual fee you don’t want, call the issuer and ask to downgrade rather than close.

4) “Removing a negative item from my report always requires a new lender’s approval or paying a settlement.”

  • The fact: False in many cases. You can dispute inaccurate or unverifiable items directly with the credit bureaus; the bureaus must investigate. For valid negative items, removal typically occurs only when timed limits expire (e.g., most negatives fall off after seven years) or when a creditor agrees to remove it as part of a negotiated agreement. See FTC/CFPB guidance on disputing errors (FTC consumer info).
  • Practical step: Request your free report and dispute inaccuracies at AnnualCreditReport.gov. Keep documentation when you dispute and follow up until the bureaus complete their investigation.

5) “Hard inquiries wreck my credit forever.”

  • The fact: False. A hard inquiry typically lowers a score only a few points and the effect fades in months; inquiries fall off your report after two years. Also, many scoring models treat multiple inquiries for the same type of loan (auto, mortgage, student) within a short window as a single inquiry to allow for rate-shopping — the exact window varies by scoring model (commonly 14–45 days) (myFICO).
  • Practical step: When rate-shopping for a mortgage or auto loan, bundle applications into a short period and avoid unrelated new-credit applications before closing a major loan.

6) “Paying off a charged-off account always helps my score immediately.”

  • The fact: Not always. Paying a charged-off or settled debt may improve your standing with the creditor and reduce collections activity, but the charged-off status can remain on your report for up to seven years from the date of first delinquency and may still affect your score. That said, paying or settling often helps with lenders’ underwriting decisions and can be a required step toward restoring access to credit.
  • Practical step: Before paying, get any settlement agreement in writing that outlines what will be reported to the credit bureaus.

7) “My spouse’s credit score affects mine automatically.”

  • The fact: False. Your credit scores are individual. Joint accounts (like a mortgage or joint credit card) will affect both parties, but merely being married does not merge scores.
  • Practical step: If you share accounts, monitor them together and consider separate credit-builder accounts if one partner is rebuilding credit.

8) “Age directly affects my credit score.”

  • The fact: False. Scoring models don’t use your age as a variable. However, age correlates with length of credit history — older accounts generally help your score (all else equal).

Where people actually lose points (and how to avoid it)

  • Missed payments: The biggest single driver of score drops. Always prioritize staying current on credit obligations.
  • High utilization: Keep balances low relative to limits.
  • New accounts: Opening many accounts in a short time can reduce your average account age and add hard inquiries.
  • Collections and public records: These have outsized negative effects; prevent them by staying on top of bills and negotiating with creditors before accounts get charged off.

Actionable plan to protect and improve your score (30–90 day & 6–12 month)

  • 0–30 days: Get your free reports at AnnualCreditReport.gov and review for errors. Set autopay for minimums to avoid late payments.
  • 30–90 days: Lower utilization by moving balances to cards with higher limits or paying down balances. Dispute any inaccuracies in writing.
  • 3–12 months: Avoid unnecessary new credit; focus on building on-time payment history. Consider a secured card or a credit-builder loan if you have thin credit.
  • 6–12 months+: Recheck scores and reports regularly. If you had errors removed, document the changes for future lender conversations.

Helpful resources and related FinHelp articles

Quick myth-check checklist

  • Soft inquiry? No effect. Hard inquiry? Small, temporary effect.
  • Carrying a balance? No benefit — avoid interest.
  • Closing accounts? Usually hurts by raising utilization and shortening history.
  • Marriage? Separate scores unless you share accounts.

Professional perspective

In my practice I often find that simply clearing up misunderstandings (for example, explaining soft vs hard inquiries or showing a client how utilization is calculated) yields faster improvements than chasing more complicated strategies. Small, consistent behaviors — on-time payments and low utilization — are the dependable drivers of positive change.

Sources and authority

Disclaimer

This article is educational and not personalized financial advice. For guidance tailored to your situation, consult a certified credit counselor or financial advisor.

If you want, I can convert this into a printable checklist, an email-friendly version for clients, or a short FAQ targeted at first-time borrowers.