When talking about credit score, there are many myths or misconceptions that keep the borrower’s judgement clouded. A credit score is an important number when you plan to apply for a credit card or a new loan. Many times, your credit score is also fetched by insurance companies to decide your premium amount and/or coverage.
Understanding Credit Score – Common Myths
Because credit score can easily be misunderstood, it is important to debunk the most common myths surrounding credit score. These are:
Myth 1: Checking my credit score regularly will lower it
This is the most common error in understanding the credit score. When you pull your credit score, it is counted as a soft enquiry and this does NOT lower your credit score. In fact, the more updated you are on your credit score, the higher are your chances of getting credit approved.

Myth 2: My income affects my credit score
Credit score is calculated basis the information mentioned in your credit report and your income is NOT mentioned anywhere in your credit report. Therefore, you could be having a CTC of Rs. 15 lakh and still have a poor credit score if your credit behaviour is not good. Likewise, a person with a fairly lower income may have a high credit score if their credit history is healthy, i.e. timely payment of bills and balanced credit utilization, among other factors.
Also Know: How does Credit Information Bureau Limited (CIBIL) calculate credit scores?
Myth 3: Credit Score is the Sole Determinant of Securing a Loan/Credit Card
Yes, credit score plays a vital role in getting favourable loan options and good credit cards but it’s not the only factor here. There are other factors like your age, the nature of your job (whether you’re salaried or not), etc. Your credit score could be good but it won’t be the only deciding factor.
Myth 4: Closing old accounts can help improve credit score
Many people believe that having more than two credit cards will pull down their credit score. And thus, they tend to close their older credit accounts by giving up their credit cards which are no longer in use. This can inadvertently go wrong as closing an old credit account will shorten your credit history. A long credit history helps the lender understand your credit behaviour better. However, if you feel that you can lose your credit card or will not be able to use it judiciously, then consider closing that credit card after thorough analysis.
Suggested Read: Pros and Cons of Owning Multiple Credit Cards
Myth 5: Debit cards can help build a credit score
Purchasing anything via debit cards is just like paying in cash. You are not borrowing from a lender but only using the money that’s already in your bank account. This does not impact your credit score in any way.

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So, what actually helps to increase your credit score?
Do the following and see your credit score improve gradually:
- Pay your bills on time
- Try to pay in full; if not, try breaking the total amount into smaller parts and pay across the billing cycle (this helps keep your balances low)
- Turn on the auto-pay feature to never miss an EMI
- Don’t close your old accounts without proper consideration
- Check your credit score regularly
- If found errors in your credit report, inform the bureau and dispute it immediately
- Don’t apply for multiple credit cards or loan in a short period of time
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