Credit Score Myths Debunked

There are several ways to boost your credit score, and the more strategies you understand, the better positioned you’ll be. But there’s also a lot of misinformation out there. Let’s clear up some of the most common credit score myths.

Paying Bills Does Not Matter

False. The biggest—and simplest—way to improve your credit score is also the least exciting: pay your bills on time, every time.

• Payment History. Payment history is the most important factor in your credit score. Even one late payment can have a negative impact. On the flip side, consistent on-time payments build trust with lenders and strengthen your score over time. Paying your bills matters a lot.

Pay Some of Your Debt, You’ll Be Fine

Nope. Making minimum payments keeps your account in good standing, but it doesn’t do much to improve your score.

• Credit Utilization. Your credit utilization ratio measures how much of your available credit you’re using. Ideally, you want this below 30%—and lower is even better.

Lowering Credit Utilization

Here are some of the best ways to lower credit usage:

• Pay down balances as much as possible.
• Pay off credit cards in full each month if you can.
• Consider a balance transfer credit card to reduce interest while paying down debt.

The less debt you carry relative to your credit limit, the better off your score will be.

Closing Old Cards Helps Your Score

Not Quite. The truth is exactly the opposite. In many cases, closing old credit cards can actually hurt your score.

• Credit History Length. Keeping older accounts open helps show a long, stable credit history, which lenders like to see.
• What to Do Instead. If the card has an annual fee:
  • Contact the lender
  • Ask about switching to a different version of the card without the fee
  • This way, you can maintain a long credit history without extra fees.

Checking Your Credit Hurts Your Score

Nope. Checking your own credit is considered a soft inquiry and does not impact your score.

Hard vs. Soft Inquiries

• Soft inquiries (like checking your own score) = no impact
• Hard inquiries (like applying for a loan or credit card) = may cause a small, temporary dip

You should feel comfortable checking your credit regularly—it’s a smart habit. You can check your score and report for free on SavvyMoney through your online or mobile banking.

You Need to Carry a Balance to Build Credit

False. You don’t need to carry a balance or pay interest to build your credit.

How It Actually Works

What matters is:

• Using your credit
• Paying it off on time

Carrying a balance just means you’re paying unnecessary interest.

You can build great credit by paying your balance in full every month.

Do One Thing: Pay bills on time each month, as this is the quickest, easiest way to improve your credit score.