Credit Score Myths vs. Reality: What Really Matters According To Credit Expert
Let’s talk credit scores. Most people either ignore them or assume they’re some kind of scam. The truth? They’re just a tool, and if you understand how they work, you can make them work for you.
A 2024 Experian survey found that only 72% of consumers even had a rough idea of their credit score. That means a huge chunk of people are making financial moves without knowing one of the biggest factors that impact their money.
We’re cutting through the nonsense. We’ll break down common credit myths, explain what really moves the needle, and give you straightforward steps to take control of your score. Your credit score isn’t as complicated as people make it seem.
Keep reading, and let’s clear this up once and for all. Share this with who needs to see it.
Table of Contents
Why Listen To Dad Is FIRE?
I’m a Chartered Financial Analyst with over two decades in financial services. My credit score has been in the 800s for more than half my life. It was in the 800s when I was making $25k a year. It was in the 800s when I became a liquid millionaire at 38. It was in the 800s when I retired at 42. It is still in the 800s.
In the 12 years I have known my wife, her credit score has increased 300 points.
I understand credit scores.
If you want real advice that actually works, you’re in the right place. The image above is my score.
Expert (With 820+ Credit Score) Addresses 10 Credit Card Myths
Myth #1: Credit Scores Are Rigged 🛑
Credit scores aren’t rigged. They’re based on math, not magic. If your score is low, it’s because of your financial habits, not because the system is out to get you. Late payments, maxed-out credit cards, and too many hard inquiries will wreck your score.
But the good news? Just like bad habits lower your score, good habits will raise it. Lenders aren’t grading you on personality, they’re looking at how you pay your bills and manage debt responsibly. Play smart, and you win.
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Myth #2: Closing Old Credit Cards Helps Your Score
Think closing an old card will help your credit? Think again. Your credit history matters, a lot. The longer you’ve had an account open, the better it looks. That 10-year-old credit card you don’t use? Keep it open, even if it just sits in a drawer. It’s helping you.
This makes sense too. It shows lenders you are stable because you have a long track record of being stable.
Just make sure you use it occasionally so the issuer doesn’t close it for inactivity. Credit scores reward long, responsible credit history. Don’t cut yours short.
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Myth #3: Any Hard Inquiries Destroy Your Score
Every time you apply for a loan, credit card, or even some utilities, the lender checks your credit. That’s called a hard inquiry, and too many in a short period can drop your score.
One or two? No big deal. But five or six in a few months? Lenders start thinking you’re desperate for credit. Be strategic. Only apply for credit when you actually need it. Otherwise, let your credit history do the work.
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Myth #4: Checking Your Credit Hurts Your Score
Checking your own credit report does nothing to your score. That’s a soft inquiry, and it doesn’t count against you. What does hurt? Ignoring your credit report and letting errors or fraud go unnoticed.
You can check your report for free every year at annualcreditreport.com. Fix mistakes before they cost you. Staying informed is the easiest way to protect your score.
Myth #5: You Need Debt to Have a Good Score
No, you don’t. You need credit, not debt. There’s a huge difference. You can have a great credit score without carrying a balance or paying a cent in interest. Just use your credit card, pay it off in full every month, and keep your utilization low. That’s it.
Carrying a balance and paying interest isn’t “good for your credit.” It’s just good for the bank’s bottom line. Don’t fall for the myth.
Related Video: Bad Credit, Big Problems 13 Ways Your Score Might Be Holding You Back
Myth #6: Credit Scores Are Impossible to Improve
A bad score isn’t forever. Pay bills on time, keep balances low, and limit new credit applications. That’s the formula. Credit scores reward consistency, so don’t expect instant results.
Small, smart moves over time lead to big changes. Play the game right, and your score will climb.
Myth #7: A Higher Income Means a Higher Credit Score
Earning six figures won’t magically boost your credit score. Your income isn’t even factored into the formula. What matters is how you manage the money you have, paying bills on time, keeping balances low, and handling credit responsibly.
Someone making $40,000 with great credit habits can have a higher score than someone making $400,000 who maxes out cards and misses payments. It’s not about what you make, it’s about how you manage it.
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Myth #8: Carrying a Small Balance Improves Your Score
This one refuses to die. Carrying a balance doesn’t help your score, it just helps banks collect interest off you. The best move? Use your credit card regularly, but pay it off in full every month.
This shows lenders you can manage credit without debt stacking up. Paying interest on purpose is like setting money on fire. Keep your money, not the myth.
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Myth #9: You Only Have One Credit Score
Nope. You actually have multiple credit scores. The most common one is your FICO score, but there’s also VantageScore and variations used by different lenders. Your score can change depending on the version being used and the type of credit you’re applying for.
Mortgage lenders, auto loan companies, and credit card issuers may all see slightly different numbers. The key? Focus on good habits across the board, and all your scores will be solid.
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Myth #10: Paying Off Debt Instantly Fixes Your Score
Clearing debt is great, but your score doesn’t skyrocket overnight. It takes time. Your credit history, payment record, and utilization all play a role. If you had high balances, paying them down will help, but the full impact may take months.
Lenders like to see a track record of responsible behavior, not just one-time fixes. The best credit scores are built with patience and consistency.
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Myth #11: All Debt Is Bad
Debt isn’t the enemy, bad debt is. There’s a huge difference between maxing out a credit card on luxury purchases and taking out a low-interest mortgage for a home. Credit scores reward responsible borrowing, not debt avoidance.
A well-managed mortgage, auto loan, or student loan can actually strengthen your credit mix. The goal isn’t to avoid debt completely, but to use it wisely.
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Myth #12: You Can Pay Someone to Erase Bad Credit
If someone promises to “fix” your credit score instantly, run. Legitimate credit repair takes time and effort. No company can legally remove accurate negative information from your report.
The only way to improve your credit is to build better habits, pay bills on time, lower your debt, and dispute errors. Anything else is a scam.
Myth #13: Credit Scores Don’t Matter if You Don’t Borrow
Even if you never take out a loan or open a credit card, your score can still impact you. Landlords check credit before approving leases. Insurance companies use it to set rates. Even some employers look at credit reports when hiring.
A strong score makes life easier, even if you don’t plan on borrowing. Ignoring it won’t make it go away, it just limits your options down the road.
How to not be a bad landlord. How to be a better landlord.
Myth #14: Bankruptcy Destroys Your Credit Forever
Bankruptcy is a financial reset button, not a life sentence. Yes, it will hit your score hard, and it stays on your report for up to 10 years. But you can still rebuild.
Many people start improving their credit within a few years through responsible habits, paying bills on time, using secured credit cards, and keeping debt low. It’s not ideal, but it’s not the end of the road.
Take Control of Your Credit
Credit scores aren’t out to get you, they follow a formula. Master the basics, make smart choices, and your score will rise. No need for gimmicks, just consistent habits that pay off.
Keep balances low, pay on time, and let time do the rest. Small moves lead to big results.
Now go take control of your credit and make it work for you.
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