Credit Score Myths

Published: Nov. 15, 2021 at 11:47 AM EST
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RICHMOND, Va. (WWBT) - When it comes to your credit score, there are a lot of misconceptions out there. Which is why Rachel DePompa is breaking down credit score myths in this On Your Side Savings Guide.

About half of all Americans think carrying a small balance on a credit card is better for a credit score than paying off the balance in full each month. This is a myth.

Sara Rathner a Personal Finance Expert with NerdWallet says you’re just paying interest unnecessarily. ”It shouldn’t cost you money to grow your credit score over time. You can do it for free by paying your credit card bills in full, on time, every month.” Rathner said.

Another myth Nerdwallet discovered in a recent survey? Nearly 2 in 5 Americans (39%) think checking their own credit score could cause it to drop. Not true! Checking your score is important to do, and a lot of tools exist to allow you to do it for free.

Forty-eight percent of Americans believe closing an old card you no longer use is good for your credit score. That’s a myth.

”It’s so tempting to declutter your wallet if you don’t want to carry all that extra weight around, but it can be worth keeping an old credit card open even if you don’t really use it that much anymore,” Rathner said.

If that old card charges an annual fee, call the issuer and see if there’s a no annual fee card you can transfer your account to. Having a long-time credit card, even one you never use does help your credit score.

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