7 Top Credit Myths

Keep these credit myths in mind so you can avoid making potentially costly mistakes.



Your credit can become incredibly important when you plan to borrow money from a financial institution. Because your credit can have an great influence on your ability to get a loan, open bank accounts and have a credit card with a reasonable interest rate, it is important to understand it. Here are 7 common credit myths:

  1. Asking for your credit score hurts it. That’s not true. You can request and receive your credit score without triggering any penalty against your score. However, if a third party asks for your credit report when you apply for a line of credit, your score may be affected.

  2. Closing credit cards helps improve credit health. This has certain logic, but it may not always be true. Clipping a card decreases the credit available to you, limits the credit history for that account, and potentially, your credit score along with it. Furthermore, closing a credit card does not erase the history you had on that card. In fact, negative credit card accounts stay on the report for 6 years from the date the account first went delinquent.

  3. Co-signing does not affect your credit. Even if you co-sign on a loan, you may have a responsibility for that debt. If the other party misses a payment or a few, your credit score could be affected just like theirs.

  4. Higher pay brings higher scores. Credit scores are may not be influenced by your salary. Credit scores generally reflect how well you pay your bills, not how much money you have available to pay your bills. If you do earn a higher salary, then paying off your credit card balances may make your credit healthier.

  5. Paying the minimum keeps my score up. Many creditors look at how much you owe compared to how much debt you have available. Carrying a great amount of debt and making the minimum payment may not, by itself, move the needle on your credit score.

  6. Divorce takes away the former spouse’s bad credit habits. This is not necessarily true. You can contact your creditors and ask them to convert your joint accounts into individual accounts, but accounts of divorcees won’t automatically split after the divorce is finalized. So even if you get divorced, your accounts may remain joint, which means your former spouse’s credit habits may continue to affect your credit. Also, joint accounts that have been closed may continue to report on your credit report.

  7. All credit reports are the same. The reports produced by the two national credit bureaus, TransUnion’s being one of them, may very well show different information in different formats. That’s why it’s good to keep an eye on both credit bureau reports.

Keep these myths in mind so you can avoid making potentially costly mistakes. Start your path toward healthier credit the good old-fashioned way: don’t take out more debt than you can afford and pay your bills on time.

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