Credit Score Myths Debunked
Updated: August 26, 2025
Now is the perfect time to take steps toward boosting your credit score. Most people understand the importance of having a good score, but fewer know exactly what factors influence it, and what’s simply myth. To help clear things up, we’ve debunked some of the most common credit score misconceptions below.
Checking My Score Lowers It – FALSE
Checking your credit score will not lower it – a common myth that often stops people from keeping track of their credit health. In fact, regularly monitoring your credit is one of the best ways to stay informed and protect yourself. You’re entitled to a free credit report at AnnualCreditReport.com. Reviewing these reports helps you make sure all the information is accurate and up to date.
In addition, free tools like Credit Karma and Credit Sesame make it easy to check your score anytime. Our Launch experts recommend these apps not only for the convenience of tracking your score but also for their helpful features, like real-time alerts about new inquiries, accounts, or changes to your credit file. These alerts act as an early warning system, helping you spot potential fraud or identity theft quickly.
Closing Credit Card Accounts Raises My Score – It Depends
Answer: Yes and no. It depends on factors like how long you’ve had the card and what your current balance is. Before making a decision, it’s always a good idea to call your financial institution and speak with a member service representative about your specific situation.
In most cases, it’s not recommended to close a credit card account, since doing so can reduce your available credit and potentially increase your utilization ratio, which may lower your credit score. However, if your main reason for closing the card is to avoid paying an annual fee, you have options. Launch offers two Visa® credit cards with no annual fee, giving you the flexibility to manage your finances without that extra cost.
You Need a Perfect Credit Score – FALSE
Income Affects My Score – FALSE
- Payment History (35%)
- Capacity (30%)
- Length of Credit History (15%)
- Types of Credit (10%)
- New Credit (10%)
Carrying a Credit Card Balance Increases My Score – FALSE
There’s Only One Credit Score – FALSE
There are 3 major credit bureaus: Equifax, Experian, & TransUnion. There are two main scoring models: FICO Scores & Vantage Scores. Launch CU uses FICO.
Paying Off Negative Accounts Increases My Score – Not Always
Launch experts explain that the impact of a collection account on your credit score generally lessens over time. In some cases, paying off an old collection can cause a temporary dip in your score because it updates the account and brings it back into focus. However, if the collection is significant and the company continues contacting you, it’s usually best to pay it off to prevent further issues. Keep in mind that even after being paid, collection accounts can remain on your credit report for 7–10 years, although their effect on your score will gradually diminish.
Paying Off Student Loans Increases My Score – FALSE
Paying off installment loans typically doesn’t cause a dramatic increase in your credit score. Unlike credit cards, which are revolving accounts, installment loans are fixed, scheduled payments that are already factored into your credit history. Successfully paying off an installment loan shows lenders that you can manage debt responsibly, which can have a positive long-term effect on your credit profile.
However, because installment loans don’t contribute as heavily to your credit utilization ratio (a key factor in credit scoring), the immediate boost to your score is usually modest. The biggest benefits come from maintaining a consistent payment history and reducing your overall debt burden over time.
Now that you know the myths about your credit score, you can focus on raising it. We know increasing your credit score can sound intimidating, but there are easy steps you can take to start today!
Use our credit improvement cheat sheet to boost that powerful three-digit number into something you can be proud of.
