NMLS#: 01883349
A reality check for homeowners and future borrowers
A lot of people treat credit like folklore—half facts, half superstition, and mostly expensive. Bad information doesn’t just confuse you; it quietly drains your wallet through higher interest rates, missed opportunities, and unnecessary fees. Here are the biggest myths that still circulate and what actually matters.
This one refuses to die.
Reality: A soft pull—like checking your score through your bank or a credit app—does nothing to your score. Only hard inquiries from new credit applications cause small, temporary dips. Monitoring your score is smart and doesn’t cost you a point.
Some people think you need to stay “in debt” to show activity.
Reality: Your score improves when you use credit and pay it off. Carrying a balance just means you’re gifting your bank interest for no reason. Zero balances are not a problem; high utilization is.
Feels logical—less credit, less risk.
Reality: Closing old accounts can actually lower your score by shortening your credit history and shrinking your total available credit. Keep long-standing accounts open unless they’re costing you annual fees.
Unfortunately, not instantly.
Reality: Paying off a collection helps, but the account can still sit on your report for up to seven years. What you’re aiming for is a “paid” status or, even better, a “pay-for-delete” agreement before you settle.
If only.
Reality: Mortgage lenders use specific FICO models, not the generic scores you see on apps. That’s why your “app score” and “mortgage score” can be 20–60 points apart. Knowing this helps you plan ahead and avoid surprises during pre-approval.
People assume higher income equals higher credit.
Reality: Income isn’t part of your credit score formula. You can earn six figures and still have bad credit if you misuse accounts. Lenders look at income separately when evaluating affordability—not creditworthiness.
It is.
Reality: A single 30-day late payment can tank your score for months and hurt you for years. Auto-pay for the minimum amount is the cheapest insurance policy you’ll ever set up.
Credit is a system, not a mystery. Understand the rules, and you keep more money in your pocket—especially when it's time to refinance, buy a home, or negotiate better rates. If you want, I can turn this into a newsletter layout with borrower-focused CTAs or add a short “credit tune-up checklist.”
