11 Myths About Credit Score

Many credit score myths spread due to a lack of knowledge, making it hard to distinguish fact from fiction. Believing these myths can negatively impact your financial decisions. Here’s a breakdown of the most common credit score myths and the truth behind them.

Checking Credit Report Hurts Your Score

Does Checking Your Credit Report Affect Your Credit Score?

No, checking your own credit report does NOT impact your credit score. However, multiple lender inquiries within a short period can lower your score and signal risk to potential lenders.

To maintain a healthy credit score, review your credit report every 3-6 months. This helps you track your financial health and improve your credit behavior if needed.

A Bad Credit Score Lasts Forever

Credit Score Depends on Your Annual Income

No, your credit score is not based on your income. A person earning ₹5 lakh per year can have a high score of 816, while someone earning ₹10 lakh may have no score at all.

Your credit score depends on how many credit lines you have and how well you manage them. If you’ve never used a credit card or taken a loan, you might not have a score—even with a high income. On the other hand, responsible credit usage with a lower income can result in a strong score, like 814.

Getting Married will Merge Your Scores

No, credit scores remain individual, regardless of marital status. Your credit score is based on your personal financial behavior, not your spouse’s.

Even if you open joint bank accounts, it won’t impact or merge your credit history or score. Each person’s creditworthiness is assessed separately.

You Can Get Access to the Credit Report Your Lender Can See

No, this is a myth. Lenders receive a detailed credit report, while consumers get a simplified version with only essential details.

Whether you access a free or paid credit report, it will always be more concise than the one provided to lenders by credit rating agencies.

Debit Card Builds a Credit Score

Applying for a New Credit will Hurt Your Credit Score

No, a single credit application won’t harm your score. However, applying at multiple lenders in a short time can trigger numerous inquiries, signaling financial distress and lowering your credit score.

To avoid this, apply only at a trusted lender, ensuring minimal impact on your credit report.

Disputing Credit Report Information will Increase Your Credit Score

Not always. You can dispute errors in your name, date of birth, contact details, bank account information, or unauthorized transactions in your credit report.

However, if a lender rejects the correction request, the credit rating agency won’t make changes, and your credit score will remain the same. Only valid corrections impacting your credit history may improve your score.

Closing a Credit Card will Build Your Score

No, closing a credit card can hurt your score. While paying off a loan may boost your score, shutting down an old credit card is seen as a negative move by credit rating agencies.

To maintain a strong credit score, it's best to keep unused cards active and make occasional small transactions. This shows you can manage multiple credit lines effectively.

Paying Off Debts will Erase the Transaction from Credit Report

No, paying off debt won’t erase it from your credit history. Past debts remain on your credit report for years, influencing your credit score and future credit approvals.

A fully repaid debt shows lenders that you managed credit responsibly, boosting your credibility. However, missed payments and defaults can hurt your score and impact loan approvals. Negative records stay for up to 7 years, while bankruptcies remain for 10 years.

A Credit Report Agency Can Fix Your Score

No, credit repair agencies can’t magically boost your score overnight. They only help you file disputes for errors in your credit report, such as mistakes in your name or transactions.

If you’re unsure how to correct inaccuracies, these agencies can assist. However, fixing a low credit score still requires responsible financial behavior over time.

Related Articles

Experian Credit Report and Credit Score

Equifax Credit Score

CIBIL Grievance and Redressal Process

CIBIL Registration and Login Process

CIBIL