You may believe you know all there is to know about building good credit, but the truth is, many "facts" about credit reporting that people spout are actually just commonly believed myths. Even those with good credit and high confidence about their own credit knowledge may be surprised to find out the truth behind these falsehoods. Keep scrolling to find the most commonly believed myths about credit, as revealed by Capital One's Credit Confidence Study.
Myth: Closing unused cards is good for credit.
Fact: Keeping your oldest cards open (and active!) will usually help your score, as the average age of your accounts is a big part of your credit score.
Myth: Paying your cell phone bill builds up your credit score.
Fact: It's important to pay all bills on time, and if you're delinquent on payments, it might show up negatively on your credit report. However, simply paying your cell phone bill doesn't positively build your score.
Myth: Holding a credit card balance is good for your credit.
Fact: Not true! Some people believe that credit card companies prefer it if you leave a balance so they'll "make money off you." The truth is, in order to build and protect your credit score, you should try to fully pay off your credit card bills on time every month.
Myth: Once a credit score is bad, it can't be rebuilt.
Fact: Healthy credit can be rebuilt over time by adopting good credit habits, such as paying off your full balance on time each month.
Myth: You only have one credit score.
Fact: In truth, there are three different credit bureaus issuing multiple credit scoring models.
Myth: Checking your credit report will reduce your credit score.
Fact: Credit score inquiries are not as much of a big, scary threat as people think. According to Capital One, "A 'hard' inquiry for credit card applications or credit checks can cause a temporary dip in your score, but 'soft' inquiries such as checking your credit score through credit monitoring tools will not impact your score."