LendingTree Academy

7 common credit score myths debunked

Written by

Jonathan McFadden


March 18, 2019

Any of these sound familiar?

“If you check your credit score, it’ll drop.”

“Shopping for rates will kill your score.”

“Your boss knows your credit score. Your boss knows everything.” 

Well, none of them is true. They are, however, among the most common credit score myths and misconceptions out there. Here are seven you should stop believing today.

Myth 1: Checking your credit score will hurt your credit

Nope. Checking your own score is considered a “soft” credit pull, which means it won’t damage your score at all. That’s one of the reasons we created the LendingTree app, a financial tool that offers you unlimited access to your credit score. Sign in to check it as often as you want.

Myth 2: Closing old accounts will boost your credit score

Some people have this idea that paying off — and then closing — credit accounts will improve their credit score. Not so much. Doing that could actually hurt your score more. That’s because closing an account affects the average age of your accounts, one of the many factors in your credit score. A longer credit history demonstrates responsible financial behavior; a shorter one does the opposite. As long as your old accounts don’t carry hefty fees, keep them open.

Myth 3: There’s only one credit score

Not even close. There are thousands of credit scoring models out there, and each one evaluates your score a little differently. While FICO may be the universe’s most well-known scoring model, there’s also VantageScore, transRisk, Experian’s National Equivalence Score, Credit Xpert Credit Score and much more.

Myth 4: Rate shopping will hurt your score

This one’s tricky. Generally, shopping for rates in which your credit is hit with multiple inquiries won’t damage your score severely if those inquiries happen within a 45-day period. That’s because some credit scoring models count it as one inquiry. The keyword is some. One credit model may give you a pass where another won’t. Also, models often give grace if you’re rate shopping for mortgages or auto loans. Applying for multiple credit cards within a short window of time requires a hard inquiry, which will cause a drop in your credit score.

Myth 5: A good credit score means you have a lot of money

Although it’s a good indicator of your financial health and habits, your credit score has nothing to do with the amount of money in your checking account. You can make six figures with terrible credit or be broke with the best credit in the world.

Myth 6: Employers check your credit score

Contrary to popular belief, employers don’t check your credit score. It’s actually against the law. They do, however, pull your credit report to get a gauge on how responsible and trustworthy you are as an individual. And when employers do examine your credit, the report doesn’t include your score.

People often confuse credit report with credit score or use the terms interchangeably. The two are closely linked, but they’re not the same.

Myth 7:  Missing a payment won’t hurt your score

False. Your payment history is the most important part of your credit score. You get rewarded for on-time payments and dinged for late or missed ones. While one missed or late payment probably won’t cause long-lasting damage, making it a habit will. Derogatory marks on your credit report (such as late payments) can linger for up to seven years and getting rid of them requires a dispute process that can be lengthy.

Avoid the headache by striving to make all your payments on time or making up for the late ones as quickly as possible.

Want to bust some more credit myths? Head to LendingTree Academy and sign up for a free account. You’ll get your credit score, plus access to courses on credit, home buying and more.