Introduction
In the United States, your credit score can influence everything from the interest rate on your mortgage to your ability to rent an apartment or even land your dream job. Yet despite its importance, credit scoring remains widely misunderstood.
Millions of Americans unknowingly sabotage their credit profiles every year — not through reckless spending or missed payments, but because of persistent credit score myths. These false beliefs can hold you back from reaching financial goals and cost you thousands in the long run.
In this in-depth guide, we’re busting the top 3 credit score myths in 2025 — ones that continue to hurt your financial health. Along the way, you’ll get actionable tips, proven insights, and expert-backed strategies to build and protect your credit the smart way.
Whether you’re rebuilding after a setback or aiming for the elusive 800+ score, understanding these myths could change your financial future.
Why Credit Scores Matter More Than Ever in 2025
Before we debunk the myths, let’s first understand why credit scores are more important than ever in 2025.
- High interest rates: With economic volatility and inflation pressures, lenders are becoming more selective — and credit scores are a crucial filter.
- More industries use credit checks: Employers, landlords, insurance companies, and even utility providers often check your credit to assess risk.
- Fintech expansion: New financial technologies offer personalized credit products — but only if your score meets minimum criteria.
Quick Credit Score Facts (FICO in 2025):
- Range: 300 to 850
- Excellent credit: 800+
- Good credit: 670–799
- Fair credit: 580–669
- Poor credit: Below 580
Knowing this, let’s tackle the 3 most damaging myths that could be holding you back.
Myth #1: Checking Your Credit Score Will Hurt It
The Truth:
Soft inquiries, like checking your own credit score through platforms like Credit Karma or Experian, do not affect your score.
The Source of the Confusion:
This myth likely stems from the confusion between soft inquiries and hard inquiries:
| Type of Inquiry | What It Is | Affects Score? |
|---|---|---|
| Soft Inquiry | You check your own credit; employer checks credit | ❌ No |
| Hard Inquiry | Lender checks credit for loan or credit card application | ✅ Yes |
Why This Myth Is Dangerous:
Many consumers avoid checking their score altogether. This leads to:
- Lack of awareness of score changes
- Missed fraud alerts or reporting errors
- Fewer opportunities to improve your score strategically
Real-World Example:
Samantha from Denver avoided checking her credit for 2 years. When she finally did, she found a $900 unpaid collection that wasn’t hers. By the time she disputed it, her score had dropped by over 100 points.
What You Should Do Instead:
- Use free credit monitoring tools like:
- Credit Karma
- Credit Sesame
- Experian
- Check your credit reports at AnnualCreditReport.com weekly (free through 2025).
- Set alerts for changes in your credit file.
Myth #2: Carrying a Balance Helps Your Credit Score
The Truth:
Carrying a balance does not help your credit score. In fact, it can hurt it — and cost you interest.
Where This Myth Comes From:
This myth likely emerged from confusion around credit utilization. Here’s the breakdown:
- Utilization ratio = Total credit used ÷ Total credit limit
- Experts recommend keeping this below 30%, ideally under 10%
Many people wrongly believe that carrying a balance proves responsible usage. But in reality:
- Paying off your card in full each month shows you manage credit well.
- You don’t need to pay interest to boost your score.
Why This Myth Hurts:
- You rack up unnecessary interest charges
- Your credit utilization stays high — which lowers your score
- You may struggle with debt snowballing
Expert Opinion:
“The idea that you need to carry debt to build credit is outdated and harmful. It leads people into debt cycles unnecessarily.” — Beverly Harzog, Credit Card Expert at U.S. News
Smart Strategy Instead:
- Make small purchases on your card monthly (Netflix, groceries)
- Pay off the entire balance before the due date
- Set up autopay to avoid late payments
- Ask for a credit limit increase every 6–12 months to reduce utilization
Myth #3: Closing Old Credit Cards Boosts Your Score
The Truth:
Closing old accounts can actually hurt your credit score.
Why This Myth Persists:
Many people think that canceling unused cards shows responsibility. But here’s what’s really happening behind the scenes:
Credit Score Factors Affected:
- Length of Credit History (15%)
- Older accounts help build a stronger history
- Credit Utilization (30%)
- Fewer cards = lower total available credit = higher utilization ratio
Example:
Alex had a credit card for 10 years with no annual fee. He closed it thinking it would simplify his finances. But his score dropped 40 points because:
- His average account age dropped
- His overall credit limit decreased, raising his utilization
What You Should Do Instead:
- Keep old, fee-free cards open — even if unused
- Use them once every 6 months for a small bill (e.g., Spotify)
- Set up auto-pay to avoid forgetting
When It’s Okay to Close a Card:
- It charges a high annual fee and offers no value
- It’s a joint account with someone you no longer trust
- It tempts you to overspend
If you must close it, consider spacing out new credit applications around the event to minimize the score impact.
Bonus Myth: Your Income or Job Affects Your Credit Score
The Reality:
Credit scores are based on credit behavior, not income or employment.
What FICO and VantageScore Evaluate:
- Payment history
- Credit utilization
- Length of credit history
- New credit
- Types of credit used
Income may be required on credit applications, but it’s not used to calculate your score.
How to Recover if These Myths Have Hurt You
If you’ve fallen victim to any of these myths, don’t worry — you can recover and build strong credit again.
Step-by-Step Recovery Plan:
- Check your credit reports from all three bureaus (Equifax, Experian, TransUnion)
- Dispute any errors immediately
- Pay off balances — prioritize high-utilization cards
- Keep old accounts open
- Make on-time payments every month — even minimums
- Limit hard inquiries — avoid multiple applications in a short period
- Use secured cards if rebuilding after major damage
Expert Tips for Growing Your Score in 2025
| Tip | Why It Works |
|---|---|
| Set up autopay | Avoids missed payments |
| Use under 10% of your limits | Low utilization boosts scores |
| Request credit limit increases | Lowers utilization |
| Mix of credit (loans + cards) | Improves score composition |
| Become an authorized user | Leverages others’ good history |
Final Thoughts: Knowledge Is Your Best Financial Tool
Falling for common credit myths can silently derail your financial goals. But with the truth in hand, you can build and protect your credit with confidence.
Recap: Top 3 Credit Myths That Hurt You
- Checking your score hurts it – False!
- Carrying a balance helps – Nope!
- Closing old cards helps – Wrong again!
By staying informed and managing your credit wisely, you can unlock better interest rates, higher credit limits, and long-term financial freedom.
FAQ Section: Clearing Up More Credit Confusion
Q1: How often should I check my credit score?
At least once a month using a free tool. This helps track progress and catch errors or fraud early.
Q2: Will applying for a credit card lower my score?
A hard inquiry will reduce your score by a few points temporarily. But opening a new account can help your credit in the long run if managed well.
Q3: Can I remove hard inquiries from my report?
Only if they were unauthorized or fraudulent. Otherwise, they will fall off naturally in about 2 years.
Q4: How long do late payments affect my credit?
Late payments can stay on your report for up to 7 years, but their impact lessens over time if you build good habits.
Call to Action
Stop letting credit myths define your financial future. Take charge today:
✅ Check your score
✅ Challenge outdated beliefs
✅ Build credit the smart way
📢 Share this post with friends or family members who still believe these credit myths — help them protect their financial future too!