When it comes to building and repairing credit, misinformation is everywhere. Many people make costly mistakes simply because they’re following advice based on myths instead of facts. Understanding the truth about how credit works can save you time, money, and unnecessary frustration.
In this post, we’ll debunk some of the most common credit myths and give you the real facts you need to make smarter financial decisions.
Myth #1: Paying Your Bills on Time Is All You Need for a Good Credit Score
The Truth:
While on-time payments are extremely important (they make up about 35% of your FICO score), they are not the only factor that matters. Your credit score is also heavily influenced by:
- Credit Utilization (30%): The amount of available credit you’re using.
- Length of Credit History (15%): How long your accounts have been open.
- Credit Mix (10%): The variety of credit accounts you have.
- New Credit Inquiries (10%): How often you apply for new credit.
👉 Key takeaway: To achieve a high credit score, you need to manage all these areas—not just pay on time.
Myth #2: Checking Your Own Credit Hurts Your Score
The Truth:
There are two types of credit inquiries: hard inquiries and soft inquiries.
Checking your own credit is considered a soft inquiry and has no impact on your score. Only hard inquiries—such as when you apply for a loan or credit card—can temporarily lower your score.
👉 Key takeaway: Regularly checking your own credit is smart and necessary to track your progress and catch errors early.
Myth #3: Closing Old Credit Cards Will Improve Your Score
The Truth:
Closing an old credit card can actually hurt your credit score. That’s because it shortens your credit history and reduces your overall available credit, which can raise your utilization rate.
👉 Key takeaway: It’s usually better to keep old accounts open, especially if they have no annual fees.
Myth #4: You Must Carry a Balance to Build Credit
The Truth:
You do not need to carry a balance and pay interest to build credit. You can pay your credit card balance in full each month and still build a strong credit history.
👉 Key takeaway: Carrying a balance only leads to interest charges. Always aim to pay your balance in full.
Myth #5: All Debt Is Bad for Your Credit
The Truth:
Not all debt is harmful. Responsible use of credit (like a mix of installment loans and revolving credit) can actually strengthen your credit score.
👉 Key takeaway: The key is to manage debt wisely, keeping balances low and making payments on time.
Final Thoughts
Credit doesn’t have to be a mystery, but it’s important to separate the facts from fiction. Believing in credit myths can hold you back from reaching your financial goals.
At JDP Credit Solutions, we’re here to help you navigate the truth about credit, repair your score, and build a solid financial future.
📞 Need expert guidance? Contact us today and let’s start building the credit profile you deserve!