Top 15 Credit Score Myths

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A credit score is a three-digit figure, with a range of 300 to 900 with 900 being the highest possible score. The score evaluates a borrower’s creditworthiness and ability to repay a loan. A borrower’s credit score is influenced by a variety of factors, including the total amount of debt they owe, how long they’ve had credit, how they repay it, and how frequently they’ve requested credit.

When you want to be approved for the best credit cards or when you want to apply for a loan, your credit score is crucial. Because it offers financial institutions an insight of their financial situation, many people work hard to keep up a decent CIBIL score.

There are several credit score misconceptions that continue to circulate because of ignorance. People find it challenging to confirm the accuracy and relevance of these myths and rumors. However, occasionally falling for the misconceptions might get you into problems. Consequently, the most common myths are listed below along with a truth check.

1. Checking your Report can Lower your Score

One of the biggest fallacies that people believe but don’t actually believe is that checking your credit report would lower your score. This is untrue since monitoring your credit score is seen as a mild pull. Your credit score is not affected by a light draw, but it is by a heavy pull. A strong pull is what happens when you apply for a new credit card.

2. Payment Record

When lenders evaluate whether or not they can trust you with credit, your credibility is crucial. Some of the things that affect your credit score are how you handle debt, whether you pay your bills on time or not, and how frequently you make late payments. To keep your credit score good, you must always pay your installments and EMIs on schedule.

3. Monitoring Your Credit Score Can Affect It

Another prevalent misconception about credit is that individuals believe that routinely checking their credit score would have a negative effect. However, the fact is that checking your score won’t affect it. Additionally, monitoring your credit score can not only keep you informed but also help you to raise it.

4. CIBIL is exclusively intended to help Banks and Financial Organizations

Individuals mistakenly think that CIBIL is solely for banks and other financial institutions, however this is untrue because it enables users to responsibly utilize their credit, which helps people make wiser financial decisions.

5. Closing old accounts might improve your Credit Score

The credit myth that having more than two credit cards can hurt one’s credit score is one that many people hold dear. As a result, customers frequently terminate their older credit accounts by turning in their unneeded credit cards. Since closing an old credit account affects your credit history, this might go awry. A extensive credit history gives the lender a better understanding of your spending habits. To improve your credit score, pay off any overdue invoices or EMIs.

6. Better Work? Better Score

A lot of individuals now think that acquiring a better job will help them earn a higher grade. That is untrue, though, as your credit report is solely dependent on the credit you have used and how you manage your debt. It is unable to reveal anything about your employment or disclose your salary.

7. Credit Scores Change Gradually

Your financial decisions have an impact on your credit score. Therefore, whether your score is high or poor, it might change according on the financial choices you make now and in the future. Periodically, credit scores and reports are updated to reflect your most recent financial and credit behavior. Your score can be severely impacted by behaviors like missing payments, making late payments, and defaulting on debts.

On the other side, you may fast raise your rating if you use your money wisely. By displaying excellent credit habits over time rather than shunning credit completely, a low score can be raised.

8. Paying Off Outstanding Debts Will Remove Old Transaction Failure History

Your credit history’s transaction history cannot be removed. It persists for years and affects both the availability of loans and your credit score. Your credit history provides insight into your spending patterns and helps lenders decide whether to approve or deny your loan or credit card application.

9. Applying for more Credit will lower your Credit Score

It’s important to know that applying for a new credit card won’t affect your credit rating. Wait a few months before reapplying if, however, your application is denied. The lender does a hard credit inquiry, often known as a credit check, when you apply for a credit card.

10. When Debts are paid off, the transaction is removed off Credit Reports

A debt that you incur stays on your credit history permanently, so paying it off won’t remove the transaction from your credit report. Depending on regular payments and other factors, it may have a favorable or negative influence on your credit score for years to come.

11. Your Annual Income will determine your Credit Score

As was previously said, your income is not taken into account while determining your credit score. How skillfully you handle your bills and credit cards will determine everything. A person who has no debts and a monthly income of 5 lakhs may have a higher credit score than a person who is using 60% of his credit limit and makes 15 lakhs per year but has no debts.

12. Credit Scores are Increased by Debit Cards

Your debit card is only a tool that you may use to manage the money in your bank account; it has nothing to do with your credit history. As a result, using or applying for a debit card has no impact on your credit score or credit history.

13. Perfect Credit Score is 0

Because lenders prefer to work with borrowers who make consistent payments and understand how to manage their credit limitations, having no credit history is also a poor indicator. Thus, having no credit shouldn’t be regarded as good.

14. Bad Credit is a Rejection Indicator

Not all options for all of your future credit requirements are closed off by a low credit score. Your credit score, which aids lenders in assessing your payback trustworthiness, is determined based on the pattern of your repayment and credit history.

A credit card or loan with a low score is still possible, but it could have extra restrictions. You can get through even if being approved will be more difficult by paying a higher rate of interest or making a larger security deposit.

15. Your Score might be fixed by a Credit Reporting Agency

When looking for ways to raise your credit score, you could run across “credit repair firms.” Some individuals might mistakenly believe that these organizations are businesses that, for a fee, can repair a poor score and raise it to a good one over night. But that is not how it operates.

If you discover inaccuracies on your credit report, a credit repair business can assist you in submitting complaints to a credit rating agency. The issue might be anything from a spelling problem in your name to a mistake in a transaction that was reported under your name.


Credit scores have become more and more commonplace over time. A strong financial history might convince lenders of your sound financial skills when you have a high credit score. By demonstrating your history of sound financial management, it ensures that you will receive the best offers when asking for financing.

It is suggested that you routinely check your credit score. By emphasizing the unpaid debts, pending invoices, EMIs, etc., it will help you keep a decent credit score. It will serve as a reminder that managing your money is necessary if you want to raise your scores.