5 Credit Score Myths That Could Be Hurting Your Finances

When Lisa got her first credit card, she was excited. She had heard a lot of advice about building credit, some from friends, some from family, and some from the never-ending stream of financial “experts” on social media. She thought she was making smart choices—until she checked her credit score one day and realized things weren’t going as planned.

Confused and frustrated, she decided to dig deeper. What she discovered changed the way she handled her finances forever.

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

Lisa had always heard that to build credit, she needed to carry a small balance on her card every month. So, even when she had enough money to pay it off in full, she left a little unpaid, thinking it would boost her credit.

One day, while talking to a financially savvy coworker, she learned the truth. Carrying a balance didn’t help—it was actually costing her money in interest and increasing her credit utilization ratio, which could hurt her score. The best way to build credit, she realized, was to use her card responsibly and pay off the full balance each month.

Feeling slightly annoyed that she had been misled for so long, Lisa made a change. From that day on, she paid her card in full and started seeing her credit score improve.

Myth #2: A High Credit Score Means You’re Wealthy

Lisa always thought that people with excellent credit scores were rich. It seemed logical—if someone had a high score, they must have a lot of money, right?

Wrong.

After doing some research, Lisa realized that credit scores don’t measure wealth; they measure how well someone manages credit. Someone making six figures could still have a poor credit score if they mismanaged their debts, while someone with a modest income could have excellent credit simply by paying bills on time and keeping debt levels low.

Lisa learned that her focus shouldn’t be on how much money she had but on how wisely she used credit.

Myth #3: Student Loans Don’t Affect Credit Scores

Like many people, Lisa assumed her student loans were just a separate part of her financial life and didn’t impact her credit. That belief quickly changed when she missed a payment.

She was shocked to see a dip in her credit score. That’s when she discovered that student loans were just like any other form of debt—if paid on time, they could help her credit. If ignored, they could seriously hurt it.

Determined not to let her student loans drag her down, she set up automatic payments and started researching repayment options. She even considered refinancing, but made sure to weigh the pros and cons first.

Myth #4: Closing a Credit Card Improves Your Score

One day, Lisa decided to clean up her finances. She had an old credit card she rarely used, so she figured she might as well close it. Luckily, she mentioned it to her coworker before making the call.

“Don’t do that unless you have a good reason,” her coworker warned. “Closing a card lowers your total available credit, which increases your credit utilization ratio. It could actually hurt your score.”

Lisa had no idea. She thought getting rid of an unused card was a good thing, but now she saw the bigger picture. Instead of closing the account, she decided to keep it open and put a small subscription on it to keep it active.

Myth #5: Social Media Always Has the Best Financial Advice

Lisa loved scrolling through financial tips on social media. Some of it seemed helpful, but some of it seemed… well, too good to be true.

She remembered seeing a video that claimed people didn’t actually have to pay debt collectors if they ignored them long enough. Another post said landlords should be tipped. And then there was a viral “money hack” where people claimed they found a loophole in a bank’s system to get free cash.

Lisa wasn’t about to take financial advice from random influencers. Instead, she started following actual experts—people with financial credentials and experience. She realized that when it came to money, trusting the wrong sources could cost her dearly.

A Smarter Approach to Credit

After learning from her mistakes, Lisa felt more in control of her financial future. She stopped believing myths, started paying attention to real credit-building strategies, and made better decisions with her money.

The biggest lesson she learned? Financial knowledge is power. The more she understood how credit worked, the more confident she felt in managing it wisely.

Now, when someone gives her credit advice, she doesn’t just take it at face value—she does her own research. And if her younger cousin ever asks for financial tips, she knows exactly what myths to bust before they fall into the same traps.

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