You’ve probably heard conflicting advice about credit scores that’s left you confused. Maybe you’re afraid to check your score, or you’re carrying unnecessary debt because someone said it helps. These widespread beliefs aren’t just wrong—they’re costing you money and opportunities. Before you make another financial decision based on what you think you know, let’s clear up the misconceptions that could be sabotaging your credit health right now.
Checking Your Credit Score Will Lower It
If you’ve ever hesitated to check your credit score because you’re worried it’ll drop, you’re not alone—but you’re also falling for one of the most persistent credit myths out there.
When you check your own credit score, it’s classified as a soft inquiry, which doesn’t affect your score at all. Unlike hard inquiries that occur when you apply for credit, soft inquiries don’t indicate you’re seeking new credit. Even employers or landlords may run soft credit checks with your permission without impacting your score.
You can check your score as often as you’d like without any negative impact. In fact, you should monitor it regularly to spot errors and detect identity theft early. Creditors also perform soft inquiries when sending you those pre-approval offers, and these checks never hurt your credit score.
Many credit card companies and monitoring services offer free checks that won’t hurt your score. Don’t let this misconception keep you from staying informed about your credit health.
You Need to Carry a Balance to Build Credit
Another widespread misconception that costs Americans millions in unnecessary interest is the belief that you need to carry a balance on your credit cards to build credit. Nearly 47% of Americans fall for this costly myth.
You don’t need to pay interest to improve your credit score. In fact, carrying a balance can harm your score if your utilization exceeds 30%. Credit scoring models look at your payment history and utilization, not whether you’re paying interest charges.
Credit scoring models actually favor zero balances. When you pay your cards in full each month, you’re demonstrating responsible credit management while maintaining a low utilization ratio. Your accounts stay active and contribute to your credit mix without accruing interest. High credit card balances can actually negatively impact your credit scores by increasing your credit utilization ratio.
The confusion likely stems from installment loans, where payoff can slightly affect scores. But credit cards work differently—they remain open after you’ve paid them off.
Your Income Determines Your Credit Score
While financial experts often discuss income and credit scores in the same breath, your paycheck amount never factors into your credit score calculation.
Credit bureaus don’t even receive your income information—they focus on payment history, credit utilization, and account management instead.
You might notice wealthier people often have higher scores, but that’s correlation, not causation. Research shows the correlation between income and credit scores is only around 0.27, indicating a modest relationship at best. Higher earners typically qualify for larger credit limits, making it easier to maintain low utilization ratios.
They’re also better positioned to make timely payments. However, you can build excellent credit regardless of income by paying bills on time and keeping balances low. In fact, 31% of Americans with income under $15,000 have achieved high credit scores through responsible financial management.
Don’t let a modest income discourage you from pursuing good credit. Your financial habits matter far more than your salary when it comes to your score.
Everyone Has One Universal Credit Score
You don’t have just one credit score—you have dozens. Each credit bureau—TransUnion, Experian, and Equifax—generates its own score using different data and scoring models. They collect varying information about your credit history and use distinct maximum score ranges. For example, TransUnion’s maximum score is 710, while Experian caps at 999 and Equifax at 700.
Beyond bureau differences, you’ll encounter multiple scoring models. FICO alone has 29 versions, including industry-specific ones for auto loans or credit cards. Each model weighs factors like payment history and credit utilization differently. The scoring model used can vary depending on whether you’re applying for a mortgage, auto loan, or credit card.
Your scores also fluctuate based on when they’re calculated and which lender requests them. Mortgage lenders might pull different scores than credit card companies. Some lenders even blend data from multiple bureaus or apply their own proprietary scoring adjustments.
There’s no single “universal” number that defines your creditworthiness.
Bad Credit Means You’re on a Credit Blacklist
Having bad credit doesn’t put you on some mysterious “blacklist” that permanently bars you from financial services.
There’s no centralized list of “bad” borrowers that lenders check. Instead, credit bureaus maintain records of your payment history, including defaults and late payments. These records show adverse consumer information reported by credit providers when you fail to make timely payments or when a creditor obtains a judgment against you.
When you apply for credit, lenders review these reports to assess your creditworthiness. Poor payment behavior leads to negative entries that can limit your options and increase interest rates, but you’re not on an actual blacklist.
You can check your credit reports for adverse information and dispute any errors. In South Africa, you’re entitled to one free report annually from each registered credit bureau, including TransUnion, Experian, Compuscan, and XDS.
While negative entries impact your access to credit, they’re not permanent. With time and responsible financial behavior, you can improve your credit standing and regain access to better financial services.
In Conclusion
Don’t let these credit score myths hold you back from financial success. You’ve learned that checking your score won’t hurt it, carrying balances isn’t necessary, and your income doesn’t directly impact your score. You’ll encounter different scoring models throughout your financial journey, and remember—bad credit isn’t permanent. Take control of your credit health by applying these truths. Start monitoring your score regularly, pay bills on time, and watch your creditworthiness improve over time.
References
- https://www.cscutx.com/blog/credit-score-myths-that-could-be-holding-you-back
- https://www.kohlercu.com/financial-wellness/this-that-and-chit-chat/boost-your-credit-score-4-myths-debunked
- https://www.equifax.com/personal/education/credit/score/articles/-/learn/credit-myths-facts/
- https://www.experian.com/blogs/ask-experian/credit-myths-vs-facts/
- https://www.ukfcu.org/blog/credit-score-myths
- https://www.experian.com/blogs/ask-experian/does-checking-your-credit-score-lower-it/
- https://www.chase.com/personal/credit-cards/education/credit-score/does-checking-your-score-lower-it
- https://www.equifax.com/personal/education/credit/score/articles/-/learn/is-it-okay-to-check-your-credit-score/
- https://www.bankrate.com/credit-cards/advice/how-credit-inquiries-affect-credit-score/
- https://www.equifax.com/personal/education/credit/score/articles/-/learn/will-checking-your-credit-hurt-credit-scores/