Credit: Myths vs. Facts
There’s a lot of advice floating around about credit — and not all of it is accurate. Misunderstandings about how credit works can sometimes lead people to make decisions that actually hurt their score instead of helping it.
Let’s clear up a few common credit myths so you can make more informed financial decisions.
Myth #1: Checking Your Credit Score Lowers It
Fact: Checking your own credit score does not lower your credit.
When you check your score yourself, it’s considered a soft inquiry, which does not impact your credit. In fact, regularly reviewing your credit can help you stay informed and catch potential issues early.
Myth #2: You Need to Carry a Balance to Build Credit
Fact: You do not need to carry a balance or pay interest to build credit.
Paying your credit card balance in full each month can still help build a strong credit history. The most important factor is making payments on time and keeping your balances relatively low compared to your credit limits.
Myth #3: Closing Old Credit Cards Improves Your Score
Fact: Closing older accounts can sometimes lower your credit score.
Your credit history length is an important factor in your credit score. Older accounts help show a longer track record of responsible credit use. Closing them may shorten your average account age and increase your credit utilization ratio.
Myth #4: Your Income Determines Your Credit Score
Fact: Your income is not part of your credit score calculation.
Credit scores are based on factors such as:
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Payment history
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Credit utilization (how much credit you’re using)
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Length of credit history
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Credit mix
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Recent credit inquiries
While income may affect whether a lender approves a loan, it does not directly impact your credit score.
Monitor Your Credit in Digital Banking
Keeping an eye on your credit is one of the best ways to stay financially informed.
With Credit Score in Digital Banking, Chambers Bank customers can easily monitor their credit, see what factors are impacting their score, and track changes over time — all in one convenient place.
If you ever have questions about your credit or what affects it, our team at Chambers Bank is always here to help.