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A credit score is a three-digit number ranging from 300 to 900, with 900 being the maximum score. The score assesses a borrower's capacity to repay a loan and creditworthiness. The amount of debt owing, the duration of their credit history, repayment methods, and the number of credit inquiries, among other things, all impact a borrower's credit score.


When we talk about credit scores, there are many myths associated with them. And due to a lack of awareness, people believe those credit score myths. However, believing in those things may sometimes get you into problems. Therefore, to eliminate your confusion, here is a list of the most common credit score myths and the facts behind them.

Top 9 Myths About Credit Score

Following are the myths about credit scores that you must be aware of:

1. Credit Score is Dependent Upon Annual Income

Few people believe that their annual income will impact their credit score. But the fact is your annual income doesn’t play any role in improving or declining your credit score. It is totally dependent upon your financial behaviour, such as borrowing duration, repayment history, debts, outstanding bills, and so on. 


If you have an average salary package but your financial health is good, your credit score will be undoubtedly high. On the other hand, if you are not a financially organised person, nothing can improve your credit score.

2. Keeping a Track of Credit Score will Affect It

Another common credit myth is people think that if they check their credit score regularly, it will create a negative impact. However, the truth is checking your score will not lower your credit score. Furthermore, keeping track of your credit score will not only keep you updated but will also assist you in improving it (if required).

3. Approval of Loans is Based Upon Credit Score

Credit score indeed plays a vital role in the approval or rejection of any loan application, but it is not a sole decider. Apart from this, lenders take other aspects like age, job profile, etc., into consideration while making any decision. So maintaining a good credit score is necessary, but along with that, you should also focus on other eligibility criteria.

4. Closing Old Accounts Might Help You Boost Your Credit Score

Many individuals believe in the credit myth that having more than two credit cards will affect their credit score negatively. As a result, people tend to cancel their older credit accounts by surrendering their unused credit cards. This may go wrong since cancelling an old credit account reduces your credit history. A prolonged credit record aids the lender in a clearer grasp of your financial pattern. Instead of this, clear your debts and pending EMIs or bills to boost your credit score.

5. Debit Cards can Assist in Building Credit Score

Debit cards can’t help you in establishing a credit history. Any transactions made with a debit card will not be considered to create your credit history because a debit card is a means to access your savings account balance which means you are using your own money. Credit scores can only be built if you take any credit from lenders.

6. A Credit Repair Bureau can Help You Improve Your Credit Score

Some individuals believe that by paying money, credit agencies can fix a bad score and raise it to a high score. But in reality, the credit repair agency works in a different way. If you uncover inaccuracies in your credit report, a credit repair business can assist you in filing a dispute with a credit rating agency.

7. Old Transaction Failure History can be Removed by Paying Off Outstanding Debts

Transaction history can’t be erased from your credit history. It stays for years and influences your credit availability and credit score. Your credit history determines your financial habits and assists lenders in accepting or rejecting your loan or credit card application.

8. Applying for New Credit Will Negatively Impact Your Credit Score

You should be aware that applying for a new credit card will not have an impact on your credit score. However, if your application gets rejected, wait for a few months before reapplying. When you apply for a credit card, the lender checks your credit score, which is known as a hard credit inquiry. Avoid sending multiple applications as multiple hard credit inquiries are not good for your credit report.

9. A Bad Credit Score can’t be Improved

Many people get upset when they see their bad credit score and think it will last for lifetime. However, if your current credit score is poor, it doesn’t mean it can’t be improved. Poor credit scores can be changed into good credit scores over time with the help of good financial management, such as clearing all debts, paying all bills, etc.


Over time, credit scores have grown highly prevalent. A good credit score is quite effective in demonstrating your solid financial capabilities to lenders. It guarantees that you obtain the greatest offers when applying for credit by displaying your background as financially responsible.


It is advisable that you should monitor your credit score regularly. It will assist you in maintaining a good credit score by highlighting the outstanding debts, pending bills, EMIs, etc. It will act as an alarm that you have to manage your finances in order to improve your scores.

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