Top 10 Credit Myths

We all know that having credit is important and that the higher your credit is, the better it is for you but when it comes to the specific details, many of us don’t know where to turn. Much of the information we find from one source can contradict our assumptions and what we were told from another source. So here we will clear up any misconceptions and focus on the truth and the fallacies when it comes to your credit score.

Checking Your Credit Will Hurt Your Score

This is a complete fabrication; you cannot hurt your score by checking it yourself but this myth does scare many individuals into not knowing what their credit score is. You should be checking your own credit report at least every 6 months to make sure everything is on track, if not more frequently. Depending on where you reside you may be able to get a free credit report once a year but even if you can’t, it’s well worth the few bucks to know where you’re at and make sure everything is running smoothly.

All the Bureaus Are the Same

Although the credit bureaus are similar and should in theory all show the same information, many times you will get a different score from one bureau than you do from another. This is why it’s important to check your credit with 3 different credit bureaus to see your approximate score. The most popular credit bureaus to check your credit with are Experian, TransUnion and Equifax and many credit report services will include information from all of these sources.

If You Pay a Past-Due Notice It Goes Away

Wrong. Even if you pay a past-due notice (which you should try to get to as soon as possible because the longer you leave it, the more negative impact it will have on your credit), it will remain on your credit report for the next 7 years.

Having Multiple Lenders Check Your Credit Will Lower It

While many people think that having multiple lenders check your credit report all at once will lower it, this is actually false. Their reasoning behind this is that it appears as though you are trying to take out multiple loans at the same time which will lower your credibility for the future and potential lenders might view you as unstable. However, the system is built understanding the fact that you are looking for the best deal you can get and the lowest interest rate you can find so even if you might have 10 potential creditors looking at your credit report, it is understood that you are not trying to take out 10 loans at the same time. The rule of thumb is that you get 14 days to look for the best loan you can get but if you space out your lenders beyond that, it is going to be viewed as trying to get multiple loans. Looking for the best deal you can find is certainly encouraged and can save you thousands of dollars down the road but try to keep it within 14 days.

Your Credit Will Suffer If You Use Credit Cards

Quite the contrary, your credit will be built up if you use credit cards responsibly by keeping them below 30% of the available limit and make your payments on time each and every month. Remember, these habits must be implemented on a consistent basis in order to see positive results; even missing a payment once can drop your credit score.

Time Cannot Heal Old Wounds

Even if you ended up dropping hundreds of points on your credit score by missing payments or always being maxed out, all those little black marks will be wiped clean every seven years. It may take some time to build up your credit after these marks have been wiped away but at least you get a clean slate to work with.

Your Report Cannot Be Changed Because Credit Bureaus Are Always Right

Checking your report is crucial because sometimes mistakes will be made that end up setting you back and it’s important to notice these and fix them right away. By writing a letter to the bureau outlining the mistakes made, you can make a difference. As soon as your letter is processed, a 30 day investigation will be conducted and if you are deemed correct, the incorrect black mark will be removed from your report.

Cancelling Credit Cards Will Increase Your Score

Although we’d all like to believe that once we pay off a credit card, it will show future lenders that we are responsible by cancelling it so we don’t rack it up again, in reality cancelling your cards will actually work against you. The percentage of money you owe relative to how much you have available to you makes up 30% of your credit report so if you have 2 credit cards with a limit of $5000 each and you owe $4000 on one card and end up paying the other card off you’ll only owe 40% of your limit. However, if you cancel your credit card and only have one card with $4000 on it, you’ll owe 80% of your limit moving your credit score downwards. Furthermore, the longer history you have on an account, the more this will work for you. Keep your old accounts active even if you don’t use them and just charge a grocery bill on it from time to time to keep it active.

Having a Good Budget, Savings and Investments Will Help Your Credit

Unfortunately your credit score has nothing o do with the amount of money you make, the amount you save or what investments you have; it is simply

Once Your Credit Score is Destroyed, It Cannot Be Fixed/Improved

No matter what your current credit score is, it can and will change over the course of time either for better or for worse due to your current financial habits. This can be good news for those who currently have very bad credit and want to improve it, but can also be a tale of caution for those who have good credit and think they are immune to negative changes.


The last thing I wanted to mention is that even if you don’t have any credit at all, you can always apply for a credit card or take out a car loan in order to start building credit. Once you do get approved, however, be sure to spend wisely and make your payments on time every month to ensure that you don’t end up with a less-than-desirable score. Show the creditors that you are responsible with your credit and try your best to keep the amount you owe under 30% of your limit. If you are currently trying to improve your credit score just keep working at it, paying down your debt (but not cancelling any credit accounts after they’re paid off) and making your payments on time and you’ll start to see an improvement within a few short months.

Staz Johnson has been passionately blogging about financial management, investing tips and other aspects of personal finance. Become a Facebook fan today!


  1. Sandy says

    Why would somebody think that checking your credit will somehow score. This is ridiculous.As for fixing a credit score. There are hundreds of companies that can repair your credit score. Yes you will need to pay for this service, but you have to pay everything in this life. Having a good score means that a bank will be able to provide you with a loan for starting a small business or you can get a good deal on mortgage. Oh my god, I would really love to see people who would believe in the myths described above?? But thanx for the article anyways, I hope it will really help someone who believes in all that stuff.

Leave a Reply

Your email address will not be published. Required fields are marked *