Credit Basics

10 Credit Myths That Cost People Money

The persistent misconceptions about credit that lead to worse financial outcomes.

Bad advice travels faster than good advice. Here are the credit myths worth unlearning.

  • "Carrying a balance helps your score." It doesn't. Pay in full.
  • "Closing old cards helps." It usually hurts by lowering average age and total limit.
  • "Checking your own credit lowers your score." It doesn't — that's a soft inquiry.
  • "You only have one credit score." You have many, per bureau and per model.
  • "Paying a collection removes it." Not automatically. Ask about pay-for-delete in writing.
  • "Income affects your score." It doesn't directly.
  • "All debt is bad debt." Mortgages and installment loans, paid on time, help credit mix.
  • "Bankruptcy erases everything from your report." It doesn't. Accurate items remain.
  • "Cosigners are safe." They're not — they're fully liable.
  • "Credit repair guarantees results." No legitimate firm will guarantee outcomes.

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