Credit Myths That Are Costing You

Credit scores feel mysterious, and the mystery creates myths. Here are five we hear often at Holmes Financial Hub — and the truth behind each.

Myth 1: Checking your credit hurts your score

Truth: Checking your own credit is a soft inquiry and does not affect your score at all. Only hard inquiries — when a lender pulls your credit for a decision — can lower it slightly.

Myth 2: You need to carry a balance to build credit

Truth: You do not. Using your card and paying the statement balance in full each month builds credit just as well — and saves you interest. Carrying a balance only costs you money.

Myth 3: Closing old cards helps your credit

Truth: Closing an older card can actually lower your score by reducing your total available credit and shortening your average account age. Keep old cards open and use them occasionally.

Myth 4: Paying off a collection removes it instantly

Truth: Paying or settling a collection updates the balance but the account may still appear on your report for up to seven years. Still, paying it is almost always the right move — and you can request a goodwill removal or a pay-for-delete arrangement.

Myth 5: Your income is on your credit report

Truth: Income is not part of your credit score. Lenders may ask about it on applications, but the bureaus do not track it. A high salary does not guarantee a high score, and a modest income does not prevent one.

Credit building is a behavior, not a mystery. If you want a plan tailored to your actual situation, our credit strategy service starts with a real review — not a template.