Common Credit Score Myths

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You may have heard about a good credit score settling things for you in case of applying for a personal loan, auto loan, credit card, etc. It is important to establish a strong credit score in view of its applications, yet there are some common credit score myths that many people hold onto that need to be debunked.

As Carl Jung feels about the potency of myths, “The most important question anyone can ask is: What myth am I living?”. 

What is a credit score and credit check

Credit score is used to predict a person’s credibility in terms of his history to pay the bills on time, which are based on the credit reports of repaying or borrowing the money. A decent credit score enables a person to enjoy more favorable credit terms. A credit score is given by a three-digit number, ranging between 300 and 850, which creditors and other lenders check before approving a credit card, new account, loan, etc. The range towards the higher end means that a person is more credible and is likely to pay all the bills on time.

As David Ramsey describes the course of debt as, “ The decision to go into debt alters the course, condition of your life. You no longer own it. You are owned”.

A credit score gives a rating of your credit worthiness, where a person with a good credit score is more on the cards to get a higher loan amount at a low-interest rate, provided his verified credit history. It is significantly important to maintain a decent credit score for it displays how reliable or risky you are as a borrower when you submit your credit score application, which directly credits your eligibility for loans. Provided its diverse application, there are some common myths associated with it, which many people tend to believe before even confirming. If you want to know and debunk those customary myths, you have landed at a proper place. 

Checking my credit score will lower it

It is a commonly held belief that checking your credit score means you are lowering it. Contrary to it, the fact is that it doesn’t hurt or affect your credit score at all, as it is considered a soft hit credit check which doesn’t affect the credit score. Even it is better for you to check credit scores on a regular basis as you may come across wrong information about you. You can rectify the erroneous information from the involved scoring agency and update the right data. 

There are many free credit score checking tools online, and you can also check the same via our credit score estimator tool.

Besides, if you spot your credit score being low, you can upgrade it to a better range while being consistent in repayment. 

My credit card balance or income affects my credit score 

Having an ample account in your bank or carrying a handsome balance on your credit card doesn’t change your credit score. While calculating your credit score, information is taken from your credit report history which impacts its value, rather than your income. There are instances where you may be earning a decent amount, and yet your credit score may be on the lower side of the range. Similarly, a person with a low income can have a good credit score with his on-time payment history. Credit score is only healthy if you are paying your bills on time.

Closing a credit card or old accounts can help with credit score

There is another common myth regarding credit scores that having more credit cards will affect them negatively. There are many people who in this regard cancel their unused credit cards which on the other side may decrease your credit history. If a person maintains a decent credit record for a long period of time, it can lead to clear advances towards improving your credit report. For boosting your credit score, it is better to come clear with your pending debts, bills, and EMIs.

Additionally, it is important to realize that a debit card has no involvement in deciding your credit score as it is used for the savings account balance. 

Credit reports remain the same for every agency

There are 2 different scoring criteria for computing credit scores as national credit reporting agencies Equifax and TransUnion. If any lender or financial institution is checking your credit scores, they may consider a credit report from any reporting agency where it is important to maintain good credit scores for both independent credit bureaus. It is also important to note that though the scoring criteria may differ, factors considered for calculating it are the same, such as payment history, credit utilization ratio, duration of credit, etc.

Bad credit loans or scores are hard to recover

Many people resonate with this myth and give up on improving their credit scores or repaying their debt with credibility. It will just further nosedive your credit scores, and make things worse for your financial history. However, if you follow the right steps you can certainly improve your credit health. It won’t happen in a couple of hours or days but will take some time, and you can change your poor credit to a good credit score within a year as well. 


As credit scores mark how big a risk can be while lending money to someone, it is important to generate a positive credit record to have a strong credit score. It can be done if you pay your bills on time, reduce your balances, and apply for a credit card only when you need it. 

As Marie Forlero speaks of consistency, “ Success doesn’t come from what you do occasionally. It comes from what you do consistently”.

What is the most common credit score in Canada?

If we look at the credit score on the Canada scale, it ranges between 650-725, where a score of 600 is considered below average, implying a higher-risk borrower. A Credit score ranging between 725- 750 implies that you have a strong track record of responsible financial behavior. 

What are the three most common credit history mistakes?

There are many instances when your credit history or reports can contain errors that can impact your financial health as well. These mistakes can cost your mortgage, auto loan, credit card, etc. Below are the most common credit history mistakes that you need to address:

  • Incorrect number of accounts
  • Balance mistakes
  • Errors pertaining to identity
What hurts credit score the most?

There are many things that may lower your credit score which needs to be rectified as soon as possible. While there are many things attributed to it, the most common things that can hurt it are:

  • Making a late payment
  • Applying for a maximum credit all at once
  • Closing a credit card account
  • Having a high debt to credit utilization ratio
  • New credit card accounts
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