Your credit score is more than just a number—it’s a key factor influencing your financial opportunities, from securing loans and mortgages to determining the interest rates you pay on credit cards and insurance. It can even affect your cell phone plan or your ability to land certain jobs.

Yet, despite its significance, credit scores remain widely misunderstood. Falling for common myths could end up costing you thousands over time. Here are some of the biggest misconceptions and the truth behind them.

Myth #1: Carrying a Credit Card Balance Improves Your Score

Nearly 60% of consumers believe that carrying a balance helps their credit score, according to a survey by U.S. News & World Report. However, the truth is the opposite.

One of the main factors in determining your score is your credit utilization ratio—the percentage of your available credit that you’re using. The lower your utilization, the better. Experts recommend keeping it below 30%, meaning if you have a credit limit of $10,000, keeping your balance under $3,000 is ideal.

Carrying a balance doesn’t help your score—it simply costs you in interest. Paying off your credit card in full each month is the best way to maintain a strong score and save money on unnecessary interest charges.

Myth #2: There’s Only One Credit Score

Many assume they have one universal credit score, but that’s not the case. While FICO is the most commonly used scoring model, lenders may also use VantageScore or their own proprietary versions.

Even within the FICO model, different lenders may use different versions, depending on whether you’re applying for a mortgage, an auto loan, or a credit card. The good news? Even if your scores vary slightly, they generally trend in the same direction, meaning if one drops significantly while another does not, it may indicate an error on a specific credit report.

Myth #3: It Costs Money to Check Your Credit

A credit score check might seem like something you need to pay for, but under federal law, you’re entitled to free credit reports from Equifax, Experian, and TransUnion once per week at AnnualCreditReport.com.

While your credit report doesn’t automatically include your score, many banks, credit card issuers, and websites like Credit Karma and LendingTree provide free access to your credit score.

Myth #4: Closing Old Credit Cards Will Boost Your Score

Many assume that closing unused credit cards will clean up their credit profile, but it often has the opposite effect.

Why? Because your credit history length is an important factor in determining your score. Keeping your oldest accounts open—even if you rarely use them—helps maintain a longer credit history, which can improve your score.

Additionally, closing a card reduces your available credit limit, which can increase your credit utilization ratio. If you have two cards with a combined limit of $10,000 and a $3,000 balance, your utilization is 30%. If you close one card with a $5,000 limit, your utilization jumps to 60%—potentially lowering your score.

Myth #5: Your Spouse’s Credit Score Affects Yours

Credit scores are individual, not combined in a marriage. If you apply for a loan or credit card in your own name, your spouse’s score won’t impact it.

However, if you apply for a joint mortgage or a shared credit account, lenders will consider both scores to assess risk. This means if one spouse has a significantly lower score, it could affect the loan terms or approval.

Myth #6: Opening a New Card Will Damage Your Credit

Applying for new credit can lead to a hard inquiry, which may temporarily lower your score by a few points. However, the impact is short-term—and responsibly managing a new account can actually improve your score over time.

A new credit card can increase your total available credit, reducing your credit utilization ratio, which is beneficial. If you’re considering opening a new card, it’s best to avoid doing so right before applying for a mortgage or another large loan.

Myth #7: A Higher Income Means a Higher Credit Score

While income affects how much money lenders might approve for a loan, it’s not a factor in calculating your credit score. Your credit score is based on borrowing behavior, including payment history, credit utilization, and credit mix—not how much money you make.

Even with a modest income, managing credit wisely—paying bills on time and keeping balances low—can result in an excellent credit score.

Myth #8: Co-Signing a Loan Won’t Affect Your Credit

Co-signing a loan means taking full financial responsibility for the debt—just as if it were your own loan.

If the primary borrower misses payments or defaults, those negative marks appear on your credit report, potentially lowering your score. Additionally, the loan balance counts toward your credit utilization, which may affect your ability to borrow in the future.

Before co-signing, consider whether you’re willing to take on the risk if the borrower struggles with repayment.

Credit myths can lead to costly financial mistakes—but knowing the truth can help you protect your score and save money over time.

Regularly monitoring your credit, managing your debt responsibly, and avoiding common misconceptions will keep you on track for strong financial health and better borrowing opportunities.