Sometimes the best of intentions can lead to the worst results — especially by following bad but well-intentioned advice on how to improve your credit score.

While not meant to be bad advice, some widely held thoughts on improving credit are actually credit card myths that could hurt your credit score more than help it. Some credit card myths are just downright odd.

Here are 11 credit card myths that we’ve debunked so they don’t hurt your credit score:

Canceling credit cards boosts my credit score

At face value, doing this makes sense. Getting rid of debt and then cutting up your credit cards and canceling them can serve as a final act of victory.

But it doesn’t work that way, says Thomas Nitzsche, a spokesman for ClearPoint Credit Counseling Solutions. While it can be psychologically therapeautic, closing the account actually damages the credit score, especially if it’s one with a long, good payment history, Nitzsche says.

Canceling credit cards can hurt a credit score by a few points decreases your debt-to-available credit ratio, says Leslie Tayne, a financial attorney and debt specialist.

“The more cards you close in a short period of time, the bigger drop you are likely to see in your credit score,” Tayne says.

Too many inquiries hurt

“While a lot of inquiries can drop your score a few points, this phenomenon is largely inflated,” Nitzsche says. “Most scoring models actually allow inquiries within a certain timeframe to just be considered one inquiry.

“The reason for this is that, for example, when shopping for a car the dealer is likely to try to get you financed with multiple banks. It would be unfair for the consumer to be dinged for this. If you have credit with a company, their risk management department pulls your credit regularly to check on your financial health with no change in score,” also called a “soft pull.”

Checking my own credit report harms my standing

Checking your own score is considered a “soft pull,” which doesn’t damage your credit standing, he says.

Most consumers who visit the credit counseling service don’t check their report regularly and aren’t aware of the free site where they should go at least annually to review their credit, Nitzsche says.

Paying on time each month results in good credit

This is another case where a debt utilization ratio comes into play for your credit score. The idea that simply paying your credit card bill on time every month will give you good credit isn’t necessarily true, says Michael Mack, an attorney and credit card expert who started a foundation called to help people recover from bankruptcy.

“If your utilization is high, then you can have a FICO score drop like a rock,” Mack says. “Utilization is the ratio of credit limit to balance. I can’t tell you the amount of times people have consulted with me thinking their credit was ‘good,” only to be shocked by a low credit score because their revolving (credit card) debt was high in relation to credit limits. Ideal utilization is 9% or lower: for average and individual utilization.”

A credit card utilization calculator can help determine your ratio so you can improve your credit score.

You must be in debt to have a good score

Not true, says Tayne, the financial attorney. A key factor that determines your credit score is your debt-to-available credit ratio, she says. If this is too high, your score will drop.

Another area that impacts a credit score is not whether you pay the balance off in full each month, but rather consistent on-time monthly payments, Tayne says. As long as you make your payments on time, you can maintain a great score with little to no debt.

FICO scores are locked in for six months

Credit scores can change monthly as the creditors update the status of your accounts each month, he says. There’s no way to know exactly when in the month the creditors report.

My debit card can’t affect my credit

While a debit card does not report to the credit bureaus, it can help or hurt you if it is tied to an overdraft line of credit, Nitzsche says.

An overdraft line of credit is basically a line of credit that is available in the event that you overdraw your checking account. If you dip below zero, the debit card will still work, but instead of drafting your checking account it will begin pulling on the line of credit.

If you fail to pay on the line of credit (most accounts are auto-paid for at least the minimum due, assuming you have enough money in your checking account by the billing date) or if you use up too much of the available credit, you can hurt your score.

In the same way, he says, if you carefully use the credit it can help you build good credit history.  It’s also important to review your bank accounts carefully, says Nitzsche, who has seen clients completely unaware that they had maxed out their overdraft line of credit.

A secured credit card helps build credit

While a secured credit card can possibly help you build credit, it’s important to understand how they work and to be aware of their limitations, Nitzsche says.

Secured credit cards are also not the same as a pre-paid credit card, which can’t help you build credit, he says. Not all secured credit cards report to the credit bureaus, and generally even the ones that do don’t report to all the bureaus — Equifax, TransUnion, and Experian.

This is because it costs the creditor money to report to each bureau and, by definition, secured credit cards cater to sub-prime borrowers with low credit limits, which can limit the bank’s ability to make money.

It’s important to ask which, if any, credit bureaus the account will report to and to understand that the deposit you pay to secure the card is not the money you will “spend,” Nitzsche says.  It’s just the security to hold the card, so you still have to pay the bill when it arrives.

I can’t build credit without having credit first

If you have no credit or bad credit, and thus no one will extend you credit, it can seem like there’s no way to get back in to the world of credit and improve your credit score. But it can be done, Nitzsche says.

Begin by reviewing your credit report for errors or items older than seven years that should be removed, he says. Then clean up any existing active lines of credit that are reporting, and then work to get new lines of credit reporting favorably.

A local bank or credit union can help you by opening a “credit builder loan” (sometimes called a “credit builder CD”) or a secured credit card.

Co-signing a loan won’t hurt as long as they pay

If you add yourself to someone’s loan on an amount large enough to affect your debt-to-income ratio, then you’re hurting your credit, Nitzsche says. If you need your own loan in the future, you may be unable to secure it if your credit shows too many other financial obligations.

The lender may or may not accept a letter stating that you do not pay the bill in order to get you qualified, but you’re still legally responsible, he says.

Pay off delinquent loan and it’s removed from credit report

If you’ve paid off a delinquent loan or credit card balance, you may think that it’s then removed from a credit report and will no longer affect your credit score. Wrong, says Becky Frost, a senior manager at Experian.

“Negative information such as late payments, collection accounts and bankruptcies will remain on a person’s credit reports for up to seven years,” Frost says. ‘Certain types of bankruptcies stick around for up to 10 years.”

Paying off the delinquent account won’t remove it from a credit report, but it will update the account to indicate it as “paid,” she says.

What other credit card myths would you like to see debunked? Let us know in the comments section below.


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  1. 1

    My husband and I are trying to buy a house. Our credit score is a 500 but we are trying to figure out ways we can bring it up. What would you suggest. Im a bit confused because we talked to lexington law and the man said that even if we pay off items it might not bring our score up. Most of our debt is $200 and below and we were just going to pay it off but now I dont know if that is the right thing to do. We are so lost but we really want to buy a house. We really need suggestions.

    • 2

      Hi Shay,

      Every case is different, so I can’t guarantee that the advice you received is good or not without having access to all of your credit reports and financial information. However, in general, if you are able to pay off your debts, it is usually a good idea to do so. You can use some tactics to raise your score once your debts are paid, because then you have a history of being in good standing to prove to potential lenders that you will use credit wisely in the future.

      Let us know what you decide to do!


  2. 3

    I had a repo from 2011, recently the debt was sold to a third party collector. Now it shows twice on my credit reports. Is that legal? What if any sort of recourse do I have?

    Thanks in advance

    • 4

      Hi Rachelle,

      When an account goes into collections, it can show up twice on your credit report. The first item is the original debt, and the second item is the new collection account. However, this is not viewed as two separate debts but as a continuation of the original debt. The original debt should reflect that it has been sold to a collection agency (indicated as charged off, transferred, or sold) to show that the original account is closed and the new account is with collections.

      You can find out more about collections accounts and how to deal with them here:


  3. 5

    I also heard that even after 7 years a creditor will sell your debt to another collector this starting time clock all over again.

    • 6

      Hi Analia,

      Collections items generally remain on your report 7 years from the date that they reported delinquent to the credit bureaus (7 years + 180 days after the payment was due). This should not be “restarted” just because your creditors sold your debt to a different company.


  4. 7

    Now, I read somewhere you explained how to pay on your credit card to improve your score. Example, I just received a secured credit card. How much should I charge of the 200 limit and should I pay it off in full at end of month or not. Also it already has a 29 fee charged on it does that count as a charge? Any help would be appreciated. I though it said never charge over 30 percent and pay off in full at end of month. Is that true or not. Then I read only 9%


  5. 9

    We live in Minnesota and SOL on card debt is 6 years, so will it come off the report in 6 years? Also, what IS the determining factor that determines WHAT day an account should come off?
    Thank you for clarification.

    • 10

      Hi Cindie,

      Unfortunately, SOLs only limit the amount of time that the creditor is allowed to take you to court to reclaim the debt. Even if an SOL has run out on your debt, you are still on the hook to pay it.

      In general, negative items will remain on your credit report for 7 years after they became delinquent or were sent to collections.

      Here is some more information about handling accounts that have been sent to collections:


  6. 11
  7. 13

    Thanks for great content . I read your blogs as soon as they come out. I am recovering from bankrupcy and find your advice on this subject very helpful. Keep up the great work.

    • 14

      Hi Teresa,

      Thanks for letting us know! Can you share some of your experiences with your bankruptcy that may be helpful to our other readers?


  8. 15

    I am continually amazed at the lack of knowledge that “experts” have regarding inquires. It is really misunderstood. True, an inquiry will not lower your score that much, even several. However, lenders look at it differently. They count the number and will decline you for a loan for “too many inquiries”. I have been rejected for one inquiry in the previous 6 months, even though my score, as they reported to me, was 748. You can’t control this, and it it difficult to control inquiries, since the credit bureaus do such a terrible job. The fact is, I do not believe, under the FCRA, that inquiries can even be reported, except to the consumer. I presently have 2 lawsuits in Fed. Court to address this issue. May not win, but so far the credit bureaus don’t have an answer.

    • 16

      Hi Larry,

      Sounds like you have a lot of experience with dealing with credit bureaus. Thanks for sharing your story, and please let us know how your efforts with this issue turn out.


  9. 17

    I am a little confused. I know negative things stay on your report 8 years. How do the statue of limitation come on to get things off of your credit? I live in Texas and the statue of limitation is 4 years for collection accounts and repos. How do I make both of them work for me?

    • 18

      Hi Renay,

      Statutes of Limitation (SOLs) limit the amount of time a creditor or collection agency has to file a lawsuit against you for an unpaid debt. So, if the SOL has lapsed, it just means that they can’t drag you into court. You are still on the hook for the debt if you have not paid it, and the creditors are still allowed to pursue getting you to pay it.

      You can learn more about dealing with accounts that have gone to collections in Mike’s video here:

      Good luck!


  10. 19

    I just read in Mikes Lesson 11 credit card myths that could hurt your credit score,that when you check your credit score,you should do it at least once a year. It also said that when you do check it you should be doing so for errors and if there is anything on there older than (7) seven years you should have those removed.
    My question is. How do you go about having those items removed? I have things on my credit report that are ten years old or older. I wanted to get financed for some kitchen appliances and was turned down.A year ago I did get my car financed tho they just wanted a little higher down payment because my credit isn’t perfect but it was fairly good with a score of 735.
    So if you could please explain to me how I get the 10 year plus items removed from my report it would be much appreciated.

    • 20

      Hi Marie,

      First of all, congratulations on your great credit score, it sounds like it took some time and hard work for you to get it an impressive 735.

      There are a few legitimate reasons that this item may still be appearing on your credit report. Keep in mind that some things, like tax liens, can stay on your report indefinitely. In general, most negative items remain on your report for 7 years, however that 7 years is can be calculated from the date that the first late payment took place or the date that the account went into collections, not the date that the account was opened.

      If you feel that this item is still appearing on your report in error, you can try using a tactic that Mike explains here:

      Good luck, and please let us know how it goes with getting this item removed!


    • 21

      Just call the credit bureaus and explain the situation and ask to have the erroneous items removed. I went through this a few years back to get a closed credit account removed from my report. I had formerly been an authorized user of this relative’s account but their credit tanked and pulled me down with them by association. Even after I had my name removed, it was still showing on my report. So I called them to request this account be removed from my credit reports as I was no longer associated with it, and within about a month I received confirmation letters and an updated credit report showing that the item was removed (and subsequently, my credit score improved). Make sure to get a written confirmation of your request and make note of everyone you speak to to process the request. Good luck!

      • 22

        Hi Lotus,

        Thanks so much for sharing your story. It just goes to show that you can make mistakes that lower your score, but the damage does not have to be permanent.

        Did you do anything else to help raise your score that you can share with us?


  11. 23

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