Image source: Getty Images
Looking for a secure place to grow your savings? See our expert picks for the best FDIC-insured high-yield savings accounts available today – enjoy peace of mind with competitive rates.
I had a friend once tell me, “Now that my credit score is over 800, I can get approved for anything I want!”
I wish it worked that way. I have an 822 score myself, and I’ve still been denied for new credit applications. A high score helps, but it’s not the only thing lenders look at.
That’s just one of many credit score myths floating around. Here are some other top ones (and the real truth you need to know).
1. Checking your credit score hurts it
Not all “credit checks” are the same. Some are completely harmless! Here’s the difference:
- Soft inquiry: This is when you check your own score or get a pre-approval offer. There is no impact on your score.
- Hard inquiry: When you submit a formal credit application (like for a card, loan, or mortgage), your score can drop by a few points, temporarily.
Monitoring your own credit and regularly checking your score is smart. You’ll spot errors, fraud, and trends early. There’s no downside — only upside!
2. Carrying a balance improves your score
This one makes me sick. A LendingTree survey found that 65% of Americans believe carrying a balance helps their credit score.
But it’s flat-out wrong. Not only does carrying debt not help your score, it costs you money in interest (at ridiculous rates).
What really matters is your credit utilization ratio, which is how much credit you’re using compared to your limit. The lower the better.
This factor makes up about 30% of your FICO® Score, which is huge. Keeping that number under 30% — or even better, under 10% — is what actually helps.
3. Closing old accounts boosts your score
It feels logical: fewer cards, cleaner history, higher score. But actually, closing an old account can hurt your credit by shortening your credit history.
If you don’t want to use an old card anymore, you don’t need to cancel it right away. Sometimes the best move is to keep it open, maybe making a small purchase once in a while to keep the issuer happy.
If your card has an annual fee you’re trying to get rid of, try calling the issuer and “downgrading” to a no-annual-fee card. This can preserve your history, credit line, and remove the fee.
4. Your income affects your credit score
This one surprises people. Lenders definitely care about your income, but credit bureaus don’t.
Your salary has zero direct impact on your credit score.
What matters are your borrowing habits. Like whether you make payments on time, keep balances low, and manage debt responsibly.
A high earner can trash their score by missing payments, while a modest income earner with discipline can rock an 800. (I’m living proof!)
5. You need to carry multiple credit cards to build credit
Nope. You can build excellent credit with just one well-managed card. What matters more is consistent on-time payments, low utilization, and a long history.
That said, having a few accounts across different issuers (like a cash back card with American Express and a travel card with Chase) can help diversify your credit mix. But it’s certainly not required.
Personally, my wife and I use two to three main credit cards. Each has a different rewards feature so we can get the most out of our everyday spending. Check out our favorite credit cards here to see which ones fit your lifestyle.
6. Credit scores are all the same
FICO is probably the most well known. But there are actually dozens of versions of how your credit is scored. VantageScore is another model, and there are industry-specific scores too.
Your score can vary depending on which model is used and which credit bureau (Equifax, Experian, TransUnion) is reporting.
That’s why you might see slightly different numbers from different sources or apps.
Don’t stress too much about the exact number. What matters is the general range you fall into.
7. You can never recover from a trashed score
This myth keeps people stuck. Maybe you missed payments in the past or even defaulted on a loan. It hurts — but it’s not permanent.
Credit scoring models place the most weight on your recent behavior. So new positive habits gradually outweigh old mistakes.
Rebuilding takes time, but it’s absolutely possible. Just keep paying your bills on time, chip away at debt, and avoid new late payments.
Many people see significant improvement in just 12 to 24 months. It’s never too late to turn things around and build a healthier financial future.
The bottom line
Your credit score is one of the most powerful numbers in your financial life. Studying how scores actually work gives you a real leg up. So don’t just assume every tip you hear is correct.
And remember: credit cards are just tools. Used responsibly, they can help you build credit, earn rewards, and simplify your finances. Used recklessly, they can drag you down with debt and late payments.
The difference comes down to how you manage them.
See our picks for the best credit cards for easy cash back and find one that works for you.
Alert: highest cash back card we’ve seen now has 0% intro APR well into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes.
We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.American Express is an advertising partner of Motley Fool Money. JPMorgan Chase is an advertising partner of Motley Fool Money. Joel O’Leary has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool has a disclosure policy.
