Credit myths that cost people money

“Carrying a balance builds credit”

It does not. Paying interest does nothing for your credit; what matters is that the account reports as used and paid on time. This myth costs people money every month for no benefit whatsoever.

“Closing cards you do not use looks responsible”

Closing removes that card’s limit from your utilization denominator, so the same balances become a higher percentage. There are reasons to close a card — an annual fee you do not want to pay is a good one — but tidiness is not one of them.

“Checking your own credit hurts your score”

Checking your own is a soft inquiry and has no effect. Only a hard inquiry from a credit application counts, and even then the effect is modest and temporary.

“You need to reach zero on every card”

Reporting zero everywhere is generally read as an unused account rather than a well-managed one. A small reported balance on at least one card usually reads better.

“A credit repair company can remove accurate negative information”

They cannot, and neither can anyone else. Accurate information stays for a period set by law. What you can do — dispute genuinely inaccurate information — you can do yourself, free, directly with the bureaus.

“Paying off a collection removes it”

Paying generally updates the status rather than removing the item. Whether that matters depends on the scoring model — some newer models ignore paid collections, older ones do not. There can be good reasons to pay a collection; expecting it to vanish is not one.

“Income affects your credit score”

Income is not on your credit report and is not in any scoring model. Lenders absolutely consider it, but it is not part of the score.

“Rate shopping wrecks your credit”

Multiple inquiries for the same kind of loan within a short window are generally treated as one shopping event by most scoring models. Shopping for a mortgage or an auto loan within a couple of weeks is normal behaviour and is treated as such.