Your credit score is a 3-digit number ranging between 300 and 900 that is calculated and provided by credit rating agencies. It acts as an indicator of a borrower’s credit behaviour and is calculated using multiple factors like repayment history, payment of credit card dues, debt to income ratio, etc. A credit score is used by lenders to determine the risk faced while lending money to a borrower or credit card applicant. 

There are various myths surrounding credit scores that often prevent individuals from regularly checking their credit score or even making a new loan/credit card application. Here, we attempt to debunk some of the common myths on credit scores that people should be aware of:

1. An individual’s income impacts his/her credit score

A person’s monthly income will determine the loan eligibility and not the credit score. Salary and income details are used for measuring or determining a borrower’s capacity to repay or make bill payments and not the potential credit risk involved.

While it’s good to know that the monthly income does not influence one’s credit records, a borrower should know what exactly impacts the credit score. Some of the factors that do have an impact include one’s payment history, total debt that is due, length of credit history, fresh credit applied for and credit mix.

2. Credit card balance helps to boost credit score

This is false. A balance on the credit card in no way helps one’s credit score. If anything, it only hurts the credit score and it may prove to be expensive due to the interest accumulated over time. It’s also a waste of money to make interest payments on credit card balance, especially if one can’t afford to make timely bill payments every month.

Balances that have long been due on an account will directly impact credit card utilization rate. The higher the credit card balance, the higher will be the utilization rate. This, in turn, will hurt the credit score of an individual.

For a balance that has been carried for very long on a credit card, it makes sense to pay it completely. This will help in saving money and also improve the credit score.

3. A good credit score indicates wealth

This is far from true. Credit scores only act as a measure of the risk of the borrower (whether he or she pays the bills on time and in full).  If an individual has a high salary, it doesn’t necessarily mean that he will end up having a high credit score. However, if the monthly income is updated with a credit card issuer to a higher amount, there is a chance for a higher credit limit offered on the individual’s credit card.  

4. One credit score for one person

One individual could have several credit scores since there are multiple different credit scoring models available in the market. The credit score of an individual may vary based on the credit bureau that issues the score. 

5. Credit score seen by individual is same as seen by lender

Most credit scores that are available online are educational credit scores. This will not necessarily be the same as what a lender will end up using. The educational credit scores are meant to give a general idea to the borrower about his or her credit health. This can’t be taken for granted and it will be wrong to assume that the lender will grant a credit limit as per the credit score seen by the borrower.

6. Debit cards help in having a good credit score

Anyone who has applied for a debit card in the hope that it will help in improving their credit score, there is set to be a disappointment. Debit cards do not have a credit aspect attached to them. No matter how much or how often one uses a debit card, it will have no impact on the credit score. Credit cards and loans are the key financial products which tend to impact the credit score of a borrower.

7. EMI moratorium impacts credit score

Moratorium on term loans can help in dealing with any liquidity crisis, especially in situations like the ongoing Covid-19 pandemic. For individuals who have made use of this facility, it is important to know that this does not impact the credit score. 

8. Debt repayment is not considered in credit report

Credit reports keep a close watch on a borrower’s credit behaviour and therefore, all loans held by an individual or closed during the time of monitoring will reflect on one’s credit report. This will impact the credit score. In case of delays in debt repayment, credit score gets impacted. It is important to note that all credit accounts are reflected on a credit report, irrespective of whether they have been paid partially or fully.

9. A low credit score is only because of multiple loans

Multiple loans may indicate the credit hunger of a borrower and multiple credit requests could hurt the credit score. However, when it comes to credit score, there are several factors at play. A higher credit score is possible even if one has multiple loans but repays them on time and keeps the debt-to-income ratio low. Someone who has fewer loans but is unable to keep a good repayment track record may see a dip in the credit score. 

10. A bad credit score never changes

Credit score calculations consider an individual’s financial past. However, this does not mean that once there is a low score, it will remain so for a lifetime. You can always try and work towards a good credit history, which can help fetch a good credit score over time. It all depends on one’s credit habits and future approach towards credit.


Due to the lack of credit knowledge, many people tend to believe myths around credit score. While borrowing credit or loans, it will help to verify and clarify such myths for better usage and approach towards credit. Instead of believing in them, one can work towards a more conscious usage of credit to build a good credit history and score. It is advisable to regularly check a credit report for a better understanding of credit score. You can check your credit score for free within a few minutes using CreditMantri. Stay credit aware and stay financially healthy!