Credit Score Myths vs. Facts

I have only one credit score. Nope – you can have many credit scores.² To start with, there are two leading scoring systems, FICO and VantageScore – and there are several variations of both.⁶ For example, mortgage lenders and auto dealers may use different versions.⁶ Plus, the three major credit reporting agencies rely on data from creditors, and the scores they produce vary based on what data they get and when they get it – so it’s highly likely those scores will differ.² There also are educational scores that you see if you use a credit monitoring service.⁷ These scores are intended to give you a sense of your standing but are not necessarily the same as what creditors see.⁷ To learn more, see “What is a Credit Score and How is it Defined?”

Only rich people and people with good jobs can have really high scores. Nope. Credit scores assess your history of managing debt, so the amount of money you have isn’t necessarily a factor.⁴ If rich people have a good score, it’s because they borrowed carefully and repaid as promised. It’s not because they have a large savings account or an impressive stock portfolio because those aren’t considered in credit scores. Likewise, a credit score does not reflect where you got the money to pay back what you borrowed – so you can have a great job or no job at all, and it’s all the same to your credit score. What matters is whether you pay your bills on time.⁸

My race and gender affect my credit score. Despite the persistence of credit score myths that education level, age, gender, race, religion, sexual orientation, and marital status influence your score, it’s just not so.⁴ None of these factors influence your credit score.

My spouse and I have the same score. You and the love of your life may share toothpaste, a streaming service password, and the blanket, but you each have your own credit score.⁹ That’s typically true even if you have some joint bank accounts.¹⁰ That said, keep in mind that if you have joint loans and fall behind on payments, it will take a toll on both your credit scores.⁹

Once I have a poor score, I’ll always have a poor score. One of the most stubborn myths about improving your credit score is that it can’t be done at all. But your credit score is not written in the stars. If you change the behavior that hurt your score in the first place, it will improve. For example, two key things you can do to rebuild your credit score are to make payments on time and pay down your total debt.¹¹ It’s true that fixing your score takes time, in part because late payments and other negatives can stay on your report for up to seven years.¹² But those negatives have progressively less impact over time.¹³

When I pay off a delinquent debt, it comes right off my credit report. Eventually, yes – seven years after it first became delinquent.¹² Until then, it will still show on your report. That doesn’t mean you shouldn’t pay it off. An account showing the debt as paid is better than one that's still unpaid.¹⁴

Paying cash for everything will boost my score. Nope. To have a good credit score, you have to use credit wisely. Paying cash may make sense if your balances are high and you want to keep them from getting higher. But someone who has used their credit card responsibly for a long time will usually have a higher score than someone who has never had a credit card or rarely used it.¹⁵

Using my debit card boosts my score. Not even a little. Sure, a debit card looks like a credit card. But your debit card is simply a way to access your checking account – you don’t incur debt when you use it. And since your credit score is all about how you manage debt, debit transactions don’t affect it.¹⁵ For the same reason, any checks you write don’t affect it, either.

Paying off and closing accounts boosts my score. Not so much. Paying down credit card balances can definitely help your score.¹⁶ Paying off car loans or mortgages may also help but typically to a smaller extent.¹⁷ And closing accounts is likely to hurt your score because doing so negatively affects two elements of your credit score: your credit utilization ratio, which goes up if your debt is spread over fewer accounts, and your credit history.¹⁸ Closing an account you’ve had for a long time reduces the average age of your credit history.¹⁸

I can buy my way out of a bad credit score. Credit repair companies want you to believe this is true. But it isn’t. Only time and good behavior can erase accurate negatives that hurt your score.¹⁹ A key word here, though, is accurate. A credit repair company can help remove errors from your report. But you can do that yourself, too, for free.¹⁹ Read “How to Dispute Your Credit Report at All 3 Bureaus” to learn how.

My employer and landlord can see my credit score. No one except you can see your credit score without your permission or a legally valid reason, like a judge deciding an amount for child-support payments.²⁰ This myth probably started because credit checks have become a routine part of many renter and employment background checks, particularly for certain jobs. But employers and potential employers can’t pull your credit report without your permission.²⁰ And credit reports don’t typically even include your score.²¹ For more, read “What is a Credit Report and Why is it Important?”

Every time you check your credit, it costs you points. Not true – there’s never a penalty for checking your own credit score.²² And any review of your credit report that’s not tied to a lending decision is known as a soft pull and doesn’t affect your score.²³ However, reviews that are used for lending decisions, known as hard pulls, typically do ding your score a few points.²³ It’s a good idea to check your credit report at least once a year to look for errors and accounts you don’t recognize – which could be evidence of identity theft.²⁴