5 Common Credit Score Myths (and the Truth Behind Them)

Credit scores can feel mysterious, like a number that decides your financial future but never really explains itself. Because of that, it’s easy to fall for credit score myths that sound convincing but aren’t entirely true. From how your score is calculated to whether checking it will hurt it, misinformation is everywhere.

At Sound Credit Union, we believe knowledge is power when it comes to your financial health. Let’s set the record straight and debunk five common credit score myths that could be standing in the way of a stronger financial future.

Myth #1: You Have No Control Over Your Credit Score

It’s easy to feel like your credit score is out of your control. After all, credit bureaus don’t publicly share the exact formulas they use, and it’s possible to be financially responsible yet still have a lower score than you’d like. But here’s the reality: while you can’t change how credit scoring models are built, you have significant influence over the factors that shape your score every month.

Your score is determined by five key factors, each of which reflects your financial habits:

• Payment history (35%): Making on-time payments is the single most important thing you can do to build or maintain a strong score. Even one missed payment can have a lasting impact.
• Credit utilization (30%): This measures how much of your available credit you’re using. Keeping balances below 30% of your credit limit signals that you can manage credit responsibly.
• Length of credit history (15%): The longer your accounts have been open, the better. Older accounts add stability and show a consistent record of credit use.
• New credit inquiries (10%): Applying for several new credit lines at once can temporarily lower your score, so it’s best to space out applications.
• Credit mix (10%): Lenders like to see that you can handle different types of credit, such as credit cards, auto loans, or installment loans.

When you understand these building blocks, credit scores stop feeling mysterious and they become manageable. Let’s dig into the next credit score myth.

Myth #2: There’s a Quick Fix to Your Credit Score

We’ve all seen ads or emails that promise to “instantly boost” your credit score. The truth is, there’s no quick fix or shortcut to lasting credit improvement. A healthy credit score is built over time through consistent, responsible habits, not one-time actions or paid “repair” programs.

The good news? The steps that make the biggest difference are straightforward:

• Pay every bill on time, every month: Payment history makes up the largest portion of your credit score, and consistency here matters most.
• Keep your balances low: Using less than 30% of your total available credit shows that you manage credit responsibly and aren’t overextended.
• Limit new credit applications: Each hard inquiry can temporarily lower your score, so space them out when possible.

These actions show lenders that you can manage credit responsibly. Over time, that steady reliability is what helps your score rise, not a quick fix or paid “repair” service.

Myth #3: Checking Your Credit Report Will Lower Your Score

This is one of the most common questions people ask: does checking your credit score lower it? This question often comes from confusing two very different types of credit inquiries: hard inquiries and soft inquiries.

Hard Inquiries

Hard inquiries occur when a lender reviews your credit report after you apply for a new credit product, like a credit card, car loan, or mortgage. Because these checks typically mean you’re taking on new debt, they can cause a small, temporary drop in your score. Multiple hard inquiries in a short time can have a slightly greater impact, though their effect usually fades within a few months.

Soft Inquiries

Soft inquiries, on the other hand, happen when you check your own credit or when companies review your report for things like pre-approved offers or background checks. These inquiries have no effect on your credit score.

That means you can and should check your own credit report regularly. Doing so helps you monitor your progress and catch errors that could be dragging your score down.

You’re entitled to one free credit report each year from each of the three major credit bureaus, Experian, Equifax, and TransUnion, through AnnualCreditReport.com.

Myth #4: Opening or Closing Multiple Credit Cards Will Improve My Score

This myth sticks around because it sounds logical, but it’s misleading. Both opening and closing accounts affect your score in different ways.

The Effects of Opening a New Credit Card on Your Credit Score

When you open new cards, your total available credit increases, which can lower your credit utilization ratio (a positive sign). However, each new account also triggers a hard inquiry and shortens the average age of your credit history, both of which can temporarily lower your score.

The Effects of Closing an Old Credit Card on Your Credit Score

On the other hand, closing old accounts may seem logical, especially if you want to simplify your finances or eliminate unused cards, but doing so can actually hurt your score by:

• Reducing your total available credit (which increases your utilization ratio)
• Shortening your overall credit history, especially if the closed card is one of your oldest accounts

Both changes can lower your score, especially if the closed card was one of your oldest or had a high credit limit.

The best strategy is balance. Open new cards only when necessary, and try to keep older accounts open if they don’t cost you fees. Those long-standing accounts add depth and stability to your credit history, key factors for a healthy score.

Myth #5: All Debt Is Bad Debt

It’s a common belief that all debt is bad, but that’s not entirely true. When used wisely, certain types of debt can actually help build credit and strengthen your financial health.

Your credit score isn’t based on whether you have debt. It’s based on how you manage it. Making regular, on-time payments shows lenders that you’re reliable and responsible, a major factor in maintaining a good credit score.

Good Debt vs. Bad Debt

Not all debt impacts your credit the same way.

Here’s the difference:

• Helpful Debt: Auto loans, student loans, or mortgages, when paid on time, can show consistent, responsible borrowing.
• Risky Debt: High-interest credit cards or large revolving balances can hurt your score if payments are missed or balances stay high.

Smart Ways to Manage Debt

• Pay every bill on time, every month.
• Keep credit card balances below 30% of your total limit.
• Avoid taking on more debt than you can comfortably repay.
• Review your budget regularly to stay ahead of payments.

Avoiding debt altogether might seem safe, but learning to use credit responsibly is what truly builds long-term financial strength. When managed carefully, debt can be a valuable tool.

The Bottom Line: Build Credit the Smart Way

Understanding these credit score myths can help you make smarter financial decisions and avoid common mistakes. Your credit score isn’t set in stone, it is a reflection of your financial habits.

Here are a few takeaways to remember:

• You have control over your credit score.
• There’s no quick fix, steady progress matters most.
• Checking your credit report won’t hurt your score.
• Opening or closing accounts too quickly can backfire.
• Not all debt is bad, responsible use builds trust with lenders.

With the right approach, your credit score will naturally strengthen as your good habits build over time.

Ready to Start Rebuilding Your Credit?

If your score needs a boost, you don’t have to do it alone. Sound Credit Union offers credit-building tools and guidance to help you get back on track, including secured credit cards designed to support your goals.