This information is provided by our friends at Pentagon Federal Credit Union (PenFed)

With so many good reasons to get a credit card, the fact is that mismanaging your payments can leave you with a puny credit score that’s too weak to qualify you for that big wish list item you’ve been hankering to buy. The details of building a better credit score are notoriously intricate, but many of the so-called rules passed down as common knowledge are actually myths that don’t affect your creditworthiness the way you think.

Myth No. 1: Paying off your debts will polish your credit report to a sparkling shine.  

Your credit report is more like a timeline than a snapshot. Paying off debts won’t make any past indiscretions disappear. 

Myth No. 2: Paying off credit card balances every month can actually hold down your score.

You might have heard that you need to carry a balance on your credit card to keep it active. The truth is that your account will be considered active even if you pay off the entire bill every month — which of course is exactly the smartest way to use a credit card.

Myth No. 3: Canceling credit cards boosts your credit score.

The common myth is that creditors look at available credit on your unused credit cards as potential debt that could hamstring your ability to pay off your debt to them, should you happen to run up all your available credit later down the road. The truth is that having several active credit accounts lets creditors know you are capable of using credit responsibly.

Myth No. 4: Closing your oldest credit card shortens your credit history.

Closed accounts in good standing remain on your credit report for 10 years from the date closed, so you’re in no danger of losing your current standing.

Myth No. 5: Asking for lower credit limits can boost your credit score.

Generous credit limits are not a negative for your credit score as long as you don’t take them as an invitation to rack up debt. Lenders look for a wide gap between the amount of debt you’re carrying and your available credit limits, so lowering your limits can actually hurt you.

Myth No. 6: Your credit score is the determining factor for whether or not you get credit.

Your credit score is just one of the factors that go into a lender’s decision to extend you credit. A lender will also consider how much debt you can reasonably take on in light of your income, your job history and your credit history.

Myth No. 7: Credit scores are biased against minorities.

The Equal Credit Opportunity Act (ECOA) prohibits lenders from considering factors including gender, race, nationality and marital status when issuing credit.

Myth No. 8: A lower income means a lower credit score.

Your credit score is about how you manage your bills, not how large the totals involved are.

Myth No. 9: A low credit score could cost you your job.

Knowing that an employer or potential employer can review your credit report can be off-putting, but your credit score is not a part of the material they will see.

Myth No. 10: Credit counseling may help you pay off debt, but it will destroy your credit rating.

The mere fact that you are working with a credit counselor will not be reported to credit bureaus and won’t affect your credit score. However, anyone reviewing your report might recognize signs that you’re working with a counselor, and strategies your counselor might recommend (such as partial payments or settling debts for a smaller amount) could definitely impact your credit score.

Myth No. 11: Checking your credit rating will lower your score.

It’s true that multiple credit inquiries can lower your score, but that does not occur if you’re the one doing the inquiring. In fact, keeping tabs on your credit report and credit score is a smart way to stay ahead of fraud and other errors.

Myth No. 12: Applying for multiple loans in order to check rates will ding your credit score.

Lenders are savvy enough to recognize when you’re shopping for loan rates. Beyond that, your credit score ignores credit inquiries made in the 30 days prior to scoring. Limit your rate shopping to a 30-day window and your score will be fine.

Myth No. 13: You don’t need to check your credit report if you always pay your bills on time.

Experts estimate that about three-quarters of all credit reports contain erroneous information, from missing account information to incorrect personal details. Check your report regularly to ensure accuracy and prevent fraud.

Myth No. 14: Divorce settlements automatically sever joint credit accounts.

While the court may have approved your arrangements to divide loans and credit card payments, the task of changing and removing names falls to you. Take action now to prevent a former spouse’s problems from carrying over to your credit report.

Myth No. 15: You can always pay a service to repair your bad credit rating.

Companies that claim to fix your credit send letters requesting verification of negative entries on your credit report, which are then temporarily removed while they’re being verified. At best, the information will be verified in your favor and removed; at worst, though, it won’t get verified and will pop right back onto your file in 30 days.

Myth No. 16: Credit scores are locked-in for months at a time.

Your credit score changes the moment new data hits your credit report. In essence, your score gets recalculated every time someone pulls your file, so it will always reflect the most recent activity and influences.

Request a free credit report at, the only site authorized by the federal government to provide free reports. Looking for a financial benchmark you can track yourself? Learn how to calculate your net worth.

Find more financial education articles like this one on PenFed’s blog.