Credit Score Myths You Might Believe

  • January 15, 2020

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When you’re applying for a mortgage, or any line of credit or credit card, lenders use your credit score to review your credit history.  A higher credit score shows lenders you are responsible with your debt and may help you get a better interest rate.  Unfortunately, there are numerous credit score myths many consumers believe.  The Wall Street Journal contributor Demetria Gallegos identified these top credit score myths to stop believing today.


Credit score checks hurt your credit score.

There is a difference between a hard credit inquiry and a soft credit inquiry.  A hard credit inquiry will appear on your credit report and impact your credit score, a soft credit inquiry will not appear on your credit report or impact your credit score.  When you apply for a loan, like a mortgage, and your lender checks your credit, that’s a hard inquiry.  When you’re checking your score yourself through a free annual credit report or when an employer or potential landlord checks your lender during a background check, that’s a soft inquiry.  In fact, you should check your credit score each year.  You can request your free credit report from or by calling 1-877-322-8228. 

Carrying a balance improves your credit score.

According to a 2018 survey by, 22% of consumers reported believing that carrying a balance improved their credit score.  Carrying a balance actually hurts your credit card score.  Your credit score is influenced by five differently weighted factors including payment history (35%), amount owed (30%), length of credit history (15%), new credit (10%), and credit mix (10%).  By carrying a balance, you are hurting both your payment history and amounts owed.  

You should close an old credit card with a high interest rate to improve your credit score.

Credit cards have variable interest rates depending on the credit card issuer and your credit profile.  For example, the first credit card you open probably has a higher interest rate than a credit card you open after you’ve improved your credit score over the years.  Closing an older credit card, even a credit card you are not using, will lower your available credit and impact your credit usage.  It’s better to keep the account open, use it once and awhile and pay it off, or put a small monthly subscription on it and pay it off each month.

Shopping for a loan hurts your credit score.

When you’re applying for a large loan like a mortgage or a car loan, you want to shop around and compare your options.  When you’re comparing lenders, you may be worried that the multiple hard credit inquiries will hurt your score.  VantageScore has a shopping period of 14 days and FICO has a shopping range of 14 to 45 days.  If you’re going to shop around for a loan, it’s best to meet with lenders within a week or two so that you stay within your shopping range. 

Selecting “credit” instead of “debit” when using your debit card improves your score.

A Credit Card Insider survey of 1051 adults found that almost half of all respondents thought selecting “credit” when making a debit card purchase improved their credit score.  When you make a purchase with your credit card, the terminal may give you the option to select debit or credit.  Selecting “credit” instead of “debit” has no impact on your credit score.  When you select “debit” your funds are withdrawn immediately and when you select “credit” it may take up to three days for the funds to be withdrawn from your account.  


If you have credit score questions, it’s best to consult a professional like a financial advisor or a credit score instead of getting swept up in myths. 


Sources: Experian, The Wall Street Journal

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