However, here are 7 myths regarding what may (but actually doesn’t) help or hurt the credit scores -
1. Checking credit scores can hurt the credit score (a “hard inquiry” where a financial firm is evaluating a potential loan to you can have an impact, but a “soft inquiry” like an employer conducting a background check does not, nor does a soft inquiry of checking your own credit score);
2. Paying bills on time is all you need to worry about (it’s not, as “credit utilization” also matters, because paying on time but always being maxed out is a negative compared to ‘just’ using 30% of your available credit each month, which can be remedied by spending less or simply asking for a credit limit increase);
3. Carrying a balance helps boost the credit score (it doesn’t, it just racks up interest charges!);
4. Closing an old card with a high interest rate will help (it doesn’t, and closing a long-standing card can actually reduce the score by reducing the average age of your credit accounts);
5. Opening a new retail card at a 0% rate is good for your score (it’s not, it’s a hard inquiry that’s more likely to reduce the score);
6. Shopping for a mortgage/auto/student loan hurts the credit score (hard inquiries matter, but if multiple hard inquiries come together, they’re bundled together as a single query, and recognized as a single transaction that reflects the borrower is likely just shopping around);
7. Assuming credit reports are accurate in the first place (the FTC found in 2012 that 21% of consumers had errors, with 5% of the cases so serious it impaired their credit… which means it really is important to monitor your credit score to ensure credit events are being reported properly!).