6 Credit Card Myths (and Facts) You Should Know was written for Playlouder by Cristina Par. Please note that contributing opinions are that of the author. They are not always in strict alignment with our own opinions.
According to a survey by Equifax, 18.6 million new credit cards were issued between January and march 2022. Many were opened with the primary goal of improving their credit score.

If you're looking to boost your credit score, you've probably researched which moves will have the biggest impact and how many points each action can add.
There is a lot of bad information out there. In this post, we're going to clear some of that up. Here are 6 credit card myths you should know. Don't worry. We'll debunk all of them.
Myth 1: Constantly Checking Your Credit Report Lowers Your Credit Score
This is one of the most common myths about credit scores. Let's set the record straight: Checking your own credit report does not lower your score.
Your score will only take a hit if you apply for new credit and a lender does a hard pull on your report. Even then, the drop is temporary, and your score will rebound soon enough.
So go ahead and check your report as often as you like! It's a good way to stay on top of your credit health and catch any errors that may be dragging down your score.
Myth 2: Applying for a Credit Card has No Effect on Your Credit Score
Does applying for a credit card hurt your credit? Sometimes. This myth is partially true.
Applying for a credit card does result in a hard inquiry on your report, which can lower your score by a few points.
But if you have a strong credit history and a good credit score, the drop will likely be negligible, and your score will bounce back. In fact, opening a new credit card can actually help your score in the long run by increasing your credit utilization ratio (more on that later).
Myth 3: You Only Need One Credit Card
It is true that you only need one credit card to build credit. But having multiple cards can actually be beneficial to your credit score in several ways.
It can help improve your credit utilization ratio, which is the second most important factor in your credit score.
Because CUR matters so much, you should know how to figure out this number for yourself. All you need to do is divide your total credit card balances by your total credit limits.
The lower your CUR, the better off you’ll be. So, having multiple credit cards allows you to keep your ratio low even if you're carrying a balance on one of them.
Additionally, having multiple credit cards can also help improve your length of credit history, which is also a factor in calculating your score.
The longer you've had credit, the better. Having multiple credit cards you've been using for several years is better for your score than having only one.
Myth 4: Keeping a Balance on Your Credit Card Will Help You Build Credit
This is another very common credit myth out there. Carrying a balance on your credit card will not help you build credit.
It can actually hurt your credit score in two ways. First, it can increase your credit utilization ratio, which we discussed earlier. Second, it can result in late payments, damaging your payment history, the most important factor in your credit score.
So, if you're trying to build credit, don't carry a balance on your credit card. Instead, use it responsibly by paying off your balance in full each month.
Pro tip: Make credit card payments twice a month. This way, if you forget to make a payment, you’ll be covered from a previous one. Missing payments on these cards is one of the worst things you can do to your credit score.
Myth 5: Having a High Credit Limit is Bad
This is a myth. A high credit limit can help actually help you by reducing your credit utilization ratio. However, if you don't carry a balance on your credit card, your credit utilization ratio will generally remain low no matter how high your credit limit is.
That said, having a higher credit limit can be a temptation to spend more. So, don’t use your high credit limit to buy items you cant afford to pay off, in full, when you get your bill!
Myth 6: Unused Credit Card Accounts Should Be Closed
This myth is generally untrue.
Closing an unused credit card account will decrease your available credit, increasing your credit utilization ratio and hurting your score.
Additionally, closing an unused credit card account may also decrease your length of credit history, depending on how old that card is. That's because the age of your oldest account is a significant portion of your rating.
So, if you have a credit card that you've had for ten years but don't use, it's better for your score to keep that account open than to close it.
Of course, there are some exceptions to this rule. For example, if you have an annual fee on an unused credit card, it might make sense to close the account to save money. Or, if you're trying to get rid of debt, you might want to close an unused credit card account so you're not tempted to use it.
At the end of the day, whether or not you should close an unused credit card account comes down to a case-by-case basis. You'll just need to weigh the pros and cons of doing so before making a decision.
4 Tips for Building Credit from Zero
The hardest part about building credit is starting from square one. Below, we’ve included a few tips to get you started on your credit journey.
1. Get a Co-Signer
If you don't have any credit history, one way to build it up is to get a co-signer. This is someone who agrees to be responsible for your debt if you can't pay it back. It shows lenders that you're capable of taking on debt and that you have someone who trusts you enough to cosign for you.
2. Use a Secured Credit Card
No co-signer? No problem.
Another way to build credit when you have no credit history is by using a secured credit card. These types of cards require a security deposit before you can use them. This deposit will usually be the same amount as your credit limit.
3. Don't Try to Open Too Many Accounts at Once
When you're first starting out, it's important not to try to open too many accounts at once. This can make it look like you're trying to take on too much debt and can negatively affect your score. Try opening one or two accounts and see how those do before applying for more.
4. Pay Your Bills on Time, Every Time
One of the best things you can do when trying to build credit is to pay your bills on time every month, no matter what.
This includes things like credit card bills, utility bills, and rent. Even if you can't pay the full amount, paying something is better than nothing.
The Bottom Line
Credit cards can be an amazing tool if used responsibly. However, there are a lot of myths out there about how they work.
This post should clear up some of the misconceptions that exist on the web. When it comes to credit cards, knowledge is power. The better you understand how they work, the more equipped you'll be to use them to your advantage.