Common Credit Score Myths Debunked

Understanding your credit score is crucial for financial health, but there are many misconceptions that can lead to poor decisions. Let's debunk some common myths and set the record straight.

Myth 1: Checking Your Score Hurts It

Many people believe that checking their credit score will negatively impact it. This is false. When you check your own score, it's considered a "soft inquiry" and doesn't affect your score at all.

Myth 2: Closing Old Accounts Improves Your Score

Actually, closing old accounts can hurt your score by:

• Reducing your available credit
• Shortening your credit history
• Increasing your credit utilization ratio

Myth 3: You Need to Carry a Balance

Carrying a balance on your credit cards does not improve your score. In fact, it's better to pay off your balance in full each month to avoid interest charges.

Myth 4: All Debt is Bad

Not all debt is created equal. Some types of debt, like mortgages and student loans, can actually help build your credit when managed properly.

Conclusion

Understanding these myths can help you make better financial decisions and maintain a healthy credit score. Remember to:

• Check your score regularly
• Keep old accounts open
• Pay balances in full
• Use credit responsibly