A credit score is a 3-digit number ranging between 300 and 900 that is calculated and provided by credit rating agencies like Equifax, CIBIL™, Experian and CRIF™. It acts as an indicator of a borrower’s credit behaviour and is calculated using multiple factors like repayment history, on-time payment of credit card dues, debt to income ratio, the mix of credits, 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 borrowers from regularly checking their credit score or making a loan/credit card application at the appropriate time. Here, we highlight and clarify some of the common credit score myths that every borrower should be aware of:

Additional Reading: How To Build Your Credit Score From Scratch?

The Top 10 Credit Myths and Truths

1. Your Income Impacts Your Credit Score

Your monthly income will determine your loan eligibility. It does not directly impact the credit score. Salary and income details are primarily used for determining a borrower’s capacity to repay or make bill payments and not for estimating the potential credit risk involved.

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

2. Credit Card Balance Helps to Improve Credit Score

This is another popular credit score myth. A credit card balance in no way helps your 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 you can’t afford to make timely bill payments every month.

Balances that have long been due on an account will directly impact the credit card utilization rate. The higher the credit card balance, the higher will be the utilization rate. This, in turn, will hurt your credit score. For a balance that has been carried for very long on a credit card, it makes sense to pay it completely and soon. This will help in saving money and also improve your credit score.

3. A Good Credit Score Indicates Wealth

This is far from true. Credit scores only act as a measure of the risk. For instance, whether you will pay the bills on time and in full.  If you have a high salary, it doesn’t necessarily mean that you will have 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 your credit card.  

4. One Credit Score Per 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. Lenders too may use various credit scores allotted by different credit agencies to verify the borrower’s credit behaviour as measured using different calculations.

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 Improving Credit Score

Anyone who has applied for a debit card in the hope that it will help in improving their credit score is in for 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 that tend to impact the credit score of a borrower.

7. EMI Moratorium Impacts Credit Score

This is one of the latest credit myths. 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 consider the 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 debt repayment accounts for the largest factor in your credit score. Debts that have been repaid in full and on time have a positive impact on your credit score. While unpaid or delayed payments bring down your credit score. When we say debt payments, we refer to all types of debts including retail loans, credit cards, etc.

9. A Low Credit Score Is Only Because Of Multiple Loans

Multiple loan applications may indicate that a borrower is credit hungry and this could hurt the credit score. However, when it comes to a low credit score, there are several factors that are influential. 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. On the other hand, if an individual has fewer loans but is unable to keep a good repayment track record, there is bound to be a negative impact on 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.


Many people tend to believe in myths about credit scores. Before borrowing loans or taking on new credit, it pays to get clarification on such myths for better usage and approach towards credit. One can work towards a more conscious usage of credit to build a good credit history and score instead of believing in such myths. 

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!


  1. Can I leave a small balance on my credit card to improve my credit score?

It is a myth that a balance on your credit card will improve your credit score. You must ensure to make credit card bill payments in full and on time to ensure a good credit score.

  1. Will a zero balance on a credit card affect my credit score?

Zero balance on your credit card means that you have paid your bills in full. This will positively impact your credit score if you have been making timely bill payments.

  1. Will my credit score be affected if I don’t use my credit card?

Not using your credit card regularly will not impact your credit score. However, if you’re looking to improve your credit score, then it’s highly recommended that you use your credit card responsibly, instead of being scared of it. Besides the credit score, your credit card offers other benefits like loyalty points, discounts, cash-free payments, etc. So use your credit card regularly to benefit from these as well as improve your credit score over time. 

  1. Can having a good credit score make me rich?

A good credit score is in no way an indication of being or becoming rich. It only means that you have a good credit history and therefore good overall credit behaviour. However, keep in mind that having a good credit score can reduce your loan burdens significantly, which can help you increase your overall savings, paving the path to financial well-being. 

  1. Will my employer see my credit score?

A credit score is primarily meant for lenders who want to check your eligibility before granting credit. However, of late, prospective employers consider the credit score of employees while selecting them for a job, especially in the financial sector. 

  1. Will my credit score go down if I marry someone with a poor credit score?

Your credit score will not be impacted by your partner’s credit score unless you jointly apply for a fresh credit card or loan.

  1. Are the credit scores of husband and wife linked?

No, both are treated as separate. However, if a husband and wife jointly apply for fresh credit, then their credit scores will be considered jointly.