Your credit score is one of the most important numbers in your financial life. It can affect your ability to get a loan, secure the best interest rates, and even influence job opportunities. Despite its importance, credit is often misunderstood—leading to myths that can hurt your financial wellness.

In honor of National Credit Education Month, let’s set the record straight by debunking four of the most common credit myths and sharing practical advice to help you take charge of your financial future.

Myth 1: Checking Your Own Credit Score Hurts It
Many people fear that just looking at their credit report will lower their score. This isn’t true. Checking your own credit is considered a “soft inquiry” and has no impact on your score. Only “hard inquiries,” which happen when you apply for new credit or a loan, can cause a small and temporary dip in your score.

Action Tip: Review your credit report at least once a year using free resources from the major credit bureaus. Monitoring your credit helps you spot errors early and guard against identity theft.

Myth 2: You Need to Carry a Balance to Build Credit
It’s a common belief that paying interest but leaving some balance on your credit card builds your score. In fact, credit scoring models reward you for paying your balances in full and on time—not for carrying debt. Having a high balance can actually harm your score by increasing your credit utilization ratio.

Action Tip: Treat your credit cards like debit cards. Charge only what you can afford and pay the full statement balance every month. It builds a positive payment history without interest charges.

Myth 3: Closing Old Credit Cards Improves Your Score
Some think closing old or unused credit cards will boost your score. Often, it does the opposite. Closing cards can reduce your average account age and increase your credit utilization ratio by shrinking your total available credit—both of which can negatively impact your score.

Action Tip: If your old card has no annual fee, keep it open and make a small recurring charge each month, like a subscription. Pay it off automatically to keep the account active and benefit your score. If the card has a high fee, ask about downgrading instead of canceling.

Myth 4: A Higher Income Means a Higher Credit ScoreHaving a high salary doesn’t directly increase your credit score. The credit bureaus don’t include your income in their scoring formulas. Your score reflects how you manage debt, not how much you make. People with modest incomes can have excellent scores if they pay bills on time and keep balances low, while high earners may have poor credit if they mishandle their accounts.

Action Tip: Build good credit by staying organized—budget, pay bills promptly, and avoid taking on more debt than you need.

Take Control of Your Credit Story
Understanding credit is the best way to avoid costly mistakes and build a strong financial foundation. Don’t let myths steer your decisions. Review your credit regularly, pay on time, and use credit wisely. By staying informed and proactive, you can make every financial decision count—this month, and every month.