The Monet Blog · Debt & Credit

Seven credit score myths that quietly cost people money

Carrying a balance does not help your score, closing old cards can hurt, and checking your own report costs nothing. What actually moves the number.

By Sankha NagChoudhurySeptember 14, 20267 min read

Credit scoring is not mysterious, but it is widely misexplained. Each of these myths leads people to pay interest they did not need to pay, or to damage a file they were trying to protect.

Myth: you must carry a balance to build credit

Paying in full still reports activity and still builds history. Carrying a balance only adds interest.

The statement balance is what gets reported, whether or not you later pay it in full.
Paying in full every month is the cheapest way to build a strong file.
Interest paid is not a credit-building fee — it buys nothing on your report.

Myth: closing a card you don't use helps

Closing a card removes its limit and eventually its age, which can push utilisation up and average account age down.

Keep no-fee old cards open with a small recurring charge paid automatically.
Close a card for a real reason — an annual fee you don't use, or overspending risk.
If a card must go, close the newest one rather than the oldest.

Myth: checking your credit lowers your score

Checking your own report is a soft inquiry and has no effect. Only applications create hard inquiries.

Get free reports from all three bureaus at AnnualCreditReport.com.
Rate shopping for one mortgage or car loan within a short window is usually treated as a single inquiry.
Dispute errors in writing; incorrect late payments are more common than people expect.

Myth: income, savings or paying rent are in the score

Traditional scores read borrowing behaviour, not wealth. A high earner with missed payments scores below a modest earner who pays on time.

Payment history and utilisation dominate the calculation.
Rent and utilities count only through specific opt-in reporting programmes.
A large savings balance never appears on your credit file.

What actually moves the number

Two levers do most of the work, and one of them can change within a single billing cycle.

Never miss a due date — automate at least the minimum payment.
Keep reported utilisation under about 30%, and under 10% if you want the best pricing.
Pay before the statement closes to lower the balance that gets reported.
Open new accounts slowly and let the file age.

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