Credit Score Facts: 5 Myths Costing You Money

I think we can all collectively agree that 2024 has been marked by rising expenses. The increasing cost of groceries, consumer goods, rent, and overall life really caught us off guard. Some of the demographics that truly FELT this pain were millennials and GenZ, driving these generations to even pitch into credit cards. In the US, 6 out of 10 adults say they are worried they will not be able to afford the rising cost of living. And it’s interesting how many of us know how to swipe a card, but not exactly how our credit works. So let’s take a step back and debunk some of the top 5 credit card mentiras many of us grew up believing.
1. Checking Your Credit Score Lowers It
If you’re scared to check your credit score like checking up on your ex’s Instagram stories, here’s the truth: Checking your OWN credit score has ZERO effect on it. This type of check is what’s called a soft inquiry, and it doesn’t harm your score. It’s like opening an incognito window—the credit bureau won’t even know you’re there. In fact, I say you should be checking your credit score regularly, because it’s good for your financial health. According to a 2023 Federal Reserve study, people who regularly check their credit scores are 24% more likely to improve them. So overall, keep yourself as informed as possible on your track to great credit with monthly check-ins.
2. Paying Your Full Balance Hurts Your Score
We listen and we don’t judge. I used to think that carrying a balance was actually good for my score because “that’s what credit companies want, therefore that is what they reward.” I was further from the truth because FICO straight up confirms that paying your balance is recommended. Credit utilization is how much of the total money they lend you, you use. So if you keep that credit utilization under 30% (say you have $1,000 you can use, try not to carry a balance of more than $300), that will help you not be affected. To see a REAL glow up? Keep it under 10%.
3. Closing Old Accounts Helps Your Score
If you have more than 6 credit cards total.. Okay go off, as long as you’re managing them and not overspending then kudos to you. But let’s say you’re like me with like 12 and then you paid off debt and you’re like “I want to get rid of some of these for ruining my life”—I’m gonna recommend you NOT do that so fast. Like I say in Texas, hold your horses. According to Credit Karma, closing those old accounts can actually drop your score faster than your tío drops relationship advice at family dinners.
Think of your credit history like aged tequila, the older it is the more valuable it becomes. Closing accounts fast can really lower your credit history and therefore drop your score. Your “credit age” makes up 15% of your FICO score, so closing old accounts is basically throwing away years of credit history. Here’s two things a financial advisor recommended me once:
- If you don’t want to see it, just cut up the card and put it away
- If you MUST close an account, try to close the ones with the least amount of years on them
- And if it’s more than 1 card, close them with at least 4 months apart
4. I Only Have One Credit Score
This is a bigger mentira than saying “I’ll only have one taco”. Mira, there’s three major credit bureaus: Equifax, Experian and TransUnion. Each one of these calculates your score differently. Some use the FICO method, and others use the VantageScore method.
Therefore, you have multiple scores. However, most people don’t know this because FICO score is the most popular choice for lenders to check. But just like your Instagram, Facebook, and TikTok all show different sides of you, your different credit scores might tell slightly different stories.
5. My Employers Have Access to My Credit Score
I know first hand how detailed a background check for work can be, because I’ve gotten a deep dive by a corporate company once (it was actually really spooky what they have permission to see). However, without my signature and consent, they can’t see my information. In fact, under the Fair Credit Reporting Act, you have a legal right to ask what it is they are trying to get permission to see. If they check without your permission, that is against the law. So instead of being scared, just know that YOU have the real authority here.
Now that we’ve cleared up these mentiras faster than your mom’s chancla cleared a room, remember: building good credit is like making your abuela’s signature dish—it takes time, patience, and consistency. No shortcuts or secret ingredients, just solid habits and time.
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