Myths About Credit Scores That Most People Still Believe

Checking your own credit score does not lower it. This myth is so persistent that millions of people avoid monitoring their own credit out of fear, which means they're flying blind on one of the most financially consequential numbers they have. FICO distinguishes clearly between soft inquiries — like checking your own score or a lender doing a background review — and hard inquiries, which happen when you apply for new credit. Soft inquiries are invisible to scoring models. Zero impact. None.

Credit scoring is one of those topics where the misinformation is unusually durable. Bad advice gets repeated by family members, posted in personal finance forums, and occasionally stated by people who should know better. The result is that a significant share of American adults are making decisions — closing old cards, avoiding credit checks, carrying small balances — that actively hurt their scores based on rules that simply don't exist. What follows are the myths with the most real-world damage.

Carrying a Balance Does Not Help Your Score

The myth that you need to carry a small balance to build credit costs American cardholders an estimated $2 billion or more in unnecessary interest every year. It's completely false. FICO scores credit utilization — the ratio of your balance to your credit limit — and lower is better. Paying your statement balance in full every month, so that you report a small balance when the statement closes, is ideal. You don't owe any interest and your utilization stays low. Lenders have also confirmed that paying in full signals responsible behavior, not avoidance.

A related myth says you should keep utilization at exactly 10% rather than lower. Experian and FICO have both stated that utilization has no memory — the model looks at where you are right now, not where you were six months ago. If your utilization is 1% this month, you score as if it's always been 1%. If it's 90%, same deal in the other direction. The practical takeaway: pay down balances before your statement closes, not just before your due date, and your reported utilization drops accordingly.

Closing Old Cards Doesn't Clean Up Your Score — It Usually Hurts It

Many people close unused credit cards thinking it will simplify their finances and improve their credit profile. In practice, closing a card almost always has one of two negative effects — and sometimes both. First, it reduces your total available credit, which increases your overall utilization ratio if you're carrying any balances. Second, if the closed card was one of your oldest accounts, it starts aging out of your average account age calculation, which can knock points off your score over time. FICO counts closed accounts in your history for up to 10 years, but the benefit diminishes.

The exception is a card with a high annual fee you're not benefiting from, where the cost outweighs the scoring impact. In those cases, closing makes sense — but do it strategically. Request a credit limit increase on another card first to offset the lost available credit. Then close the fee card. If the card has no annual fee, the cheapest move is usually to make one small purchase every few months to keep the account active, and let it sit. Issuers sometimes close inactive cards on their own, which removes the credit limit and hits your utilization whether you planned for it or not.

Income, Employment, and Debit Cards Have No Direct Effect on FICO Scores

Your salary doesn't appear anywhere in your FICO score. Neither does your job title, your employer, your checking account balance, or any debit card transaction you've ever made. FICO scores are built entirely from the data in your credit file at Equifax, Experian, or TransUnion — and none of those three bureaus track income. Lenders use income separately in their underwriting decisions, which is why two people with the same 750 FICO score can get different loan terms based on their debt-to-income ratio. But income itself has zero effect on the score number.

Using a debit card responsibly also does nothing to build credit, regardless of how disciplined you are. Debit transactions don't appear on credit reports because they don't involve credit — you're spending money already in your account. This is why credit-invisible consumers, estimated by the CFPB at roughly 26 million Americans, can have spotless financial habits and still have no usable credit score. The only paths that build FICO scores are accounts that appear on credit reports: credit cards, loans, and certain newer products like Experian Boost, which lets you add on-time utility and streaming subscription payments to your Experian file.