Since 2012, American consumers have had less knowledge about credit scores, resulting in a general lack of awareness around credit. In addition, when you don’t know much about your credit, it can be easy to believe misinformation.

Sadly, believing falsehoods about your credit can lead to poor credit decisions. Don’t be misled. Here are 5 credit score myths you should not believe:

Myth #1: Having debt hurts your credit.

The reality: You can damage your credit by having too much debt, such as maxed out credit cards or a mortgage you can’t afford. This can cause you to become overextended and even miss payments, which can damage your credit score. However, having debt does not negatively affect your credit at all.

In fact, you can build a long credit history by having debt. Having a manageable amount of debt and having a good mix of debt types (along with making your payments on time) shows creditors that you are capable of handling debt responsibly.

Myth #2: There’s only one credit report and one credit score.

The reality: Experian, Equifax, and TransUnion are the three major credit bureaus and each has its own version of your credit report. There is information about your finances and debt in every report, but the information may vary from report to report. Creditors may run credit reports from all three bureaus or just one when you apply for credit.

Credit scores are also calculated by analyzing the information in your credit report. FICO® Credit Scores and VantageScore® are the most common, but there are others. To determine your credit score, each model can weigh your credit information differently.

Due to the many credit reports and scores available, you’ll never have a single definitive credit score – it can fluctuate depending on the credit report and the scoring model used.

Myth #3: Checking your credit report harms your credit.

The reality: When you apply for credit, the creditor pulls your credit report, resulting in a hard inquiry record. You might have a minor negative impact on your credit score if you make too many hard inquiries in a short time period.

Checking your own credit report, however, is known as a soft inquiry. Your credit score won’t be affected by soft inquiries, no matter how many times you check your credit or if you use a credit monitoring service.

Myth #4: You should always close old credit cards.

The reality: When you no longer use an old credit card, you may be tempted to close it for simplicity’s sake. This, however, can negatively impact your credit report.

Your credit history plays a major role in determining your credit score, and old credit cards help with that. If you have a low balance or have paid off the old credit cards, they also reduce your credit utilization (the amount of credit you have borrowed), which is another factor that impacts your credit score.

Therefore, if you are having trouble managing your finances and an old credit card is going to get you into trouble, you should close it. It’s a good idea to keep your card open if you use it rarely and otherwise let it gather dust.

Myth #5: Good credit is only for the wealthy.

The reality: A high income can make it easier to obtain good credit, but it’s not a guarantee. Even wealthy people can have poor credit due to past bankruptcy, large amounts of debt, late payments, etc. The only way for people with limited income to have great credit is to live within their means and manage their debt responsibly.

At the end of the day, you are in control of your credit.

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