General information only, not financial advice. I am not a licensed advisor. Your own credit situation may differ; check your reports and speak to a qualified professional before making decisions.
Most credit-score advice is passed around as folk knowledge, tested against nothing. The unusual thing about this topic is that the primary sources are public, specific, and written by the companies that build the scores.
Fair Isaac — FICO — publishes a page titled “Myth Busting” stating that not paying off your credit card balance in full will likely cost you money in interest and does not help your FICO Scores. It publishes a fact sheet listing what the score cannot see. VantageScore publishes its own exclusion list. The Consumer Financial Protection Bureau publishes flat answers to the commonest questions.
And in a survey FICO ran in February 2026, 67% of Americans either incorrectly believed income affects credit scores or were unsure — a myth about a factor that has never appeared on a credit report.
The mechanism that never travels with the denial
The reason these myths survive is that the scoring companies publish conclusions without the mechanism that makes them stick. Here is the mechanism, and it collapses several myths at once.
The score is a snapshot of a data field a lender furnished on one day of the month. It is not a running judgement of financial virtue. Once that is clear, most of the folklore stops making sense.
Myth: carrying a balance builds credit
FICO’s own words: carrying a balance “doesn’t help your FICO Scores,” and the interest you pay is an extra and unnecessary cost.
The fact sheet goes further by listing “any interest rate being charged on a particular credit card or other account” among the things the score does not consider at all. The score cannot see the interest. Paying it cannot influence something that isn’t an input.
The grain of truth the myth grew from is real and more subtle: FICO notes that in some cases a low credit utilisation ratio has a more positive effect than using none of your available credit. A small reported balance can beat zero. But the reported balance is the statement-closing figure — which means you can show one and still pay the statement in full and owe no interest whatsoever. The myth confuses the balance that is reported with the balance you carry.
Myth: closing an unused card helps
FICO’s answer is no, and it publishes a worked example. Closing an old or unused card removes its credit limit from your available credit, which raises your utilisation ratio. In FICO’s illustration, closing a single zero-balance card moves utilisation from 30% to 57%.
FICO states plainly that it never recommends closing a card for the sole purpose of raising a score, and that closing zero-balance or inactive cards will not increase scores and could decrease them. VantageScore says the same thing independently: cancelling a card decreases your overall limit and hurts your score unless you proportionately reduce debt.
Two competing scoring companies agreeing against a popular tactic is about as strong as evidence gets in this field.
Myth: checking your own score hurts it
FICO, VantageScore and the CFPB all say no, independently and unambiguously. The CFPB’s answer is one sentence: checking your own credit report is not an inquiry about new credit, so it has no effect on your score.
Hard inquiries — the ones from applying for credit — are also far smaller than folklore suggests. FICO says a single additional inquiry takes less than five points off for most people, that inquiries affect the score for only twelve months though they remain visible for twenty-four, and that multiple inquiries of the same type within a 45-day window are treated as one for rate shopping. Inquiries live inside a category worth 10% of the score, and are only one characteristic within it.
Myth: the 35/30/15/10/10 breakdown is the formula
FICO publishes those category weights — payment history 35%, amounts owed 30%, length of history 15%, credit mix 10%, new credit 10% — and they are reproduced everywhere as though they were the algorithm.
FICO’s own caveat is that the importance of these categories can differ from person to person, and that the percentages are general-population averages that may not apply to a particular credit profile. VantageScore does not publish percentages at all, only ordinal rankings from “extremely influential” to “less influential.”
Nobody publishes the actual model. There are no coefficients, no reason-code weights, and no way to verify the percentages independently. FICO also maintains many live score versions simultaneously — the 14-day versus 45-day rate-shopping window difference is its own admission that “the FICO score” is not one thing.
Errors are common. Consequential errors are not.
The Federal Trade Commission’s Section 319 study — 1,001 participants, 2,968 credit reports, with reports re-scored after disputes — is the definitive American accuracy research, and it is almost always quoted at one number.
One in five consumers had an error on at least one of their three reports. That is the famous figure. The severity gradient is where the information is: 5% had an error serious enough to lead to worse terms on loans or insurance. About one in ten who had a correction made saw any score change at all, about one in twenty saw a change exceeding 25 points, and about one in 250 saw a change exceeding 100 points.
The headline number and the consequential number differ by a factor of four. What has genuinely got worse is the dispute process: the CFPB’s most recent report to Congress recorded roughly 4.8 million credit and consumer reporting complaints over an eighteen-month window, with about 52% being cases where the consumer had already tried disputing and the problem persisted.
Medical debt: check the date on what you’re reading
This is the item most likely to be wrong in anything published before late 2025, and the sequence matters.
The three national credit bureaus made voluntary changes that removed most medical debt from credit reports. From July 2022, paid medical collections stopped appearing at all and the waiting period before unpaid ones appear rose from six months to a year. From April 2023, medical collections under $500 were removed. Together, by the bureaus’ own joint statement, these removed nearly 70% of medical collection tradelines. Those changes are voluntary and remain in force.
Separately, the CFPB finalised a rule in January 2025 to address the remainder — by its own figures, $49 billion still on the reports of 15 million Americans. That rule was vacated on 11 July 2025 by the US District Court for the Eastern District of Texas, on a joint request from the plaintiffs and the CFPB itself under new leadership, on the ground that it exceeded the Bureau’s statutory authority under the Fair Credit Reporting Act.
So the rule no longer exists. The reason most medical debt is nonetheless off credit reports is the bureaus’ voluntary policy, which was never part of the litigation. Getting that backwards is the most common current error in coverage of this topic.
What the snapshot framing explains
Income, savings, assets, employment, occupation and where you live are not in the score. FICO and VantageScore both publish explicit exclusion lists and they agree. A lender may separately consider your income when deciding whether to lend — that is underwriting, not scoring, and conflating the two is where most of the confusion starts.
The same snapshot logic explains the system’s limits, not just its myths. A $49 billion pile of medical bills sat on 15 million people’s files as a risk signal that the CFPB’s own research had found less predictive of future default than ordinary collections — because the score reads what is furnished, and what was furnished was a bill.
Sources
- myFICO. Myth Busting — You Don’t Need to Carry Credit Card Balances; How are FICO Scores Calculated?; Does Closing a Credit Card Boost Your FICO Score?; Do Credit Inquiries Lower Your FICO Score?
- VantageScore. How Credit Scores Work.
- Consumer Financial Protection Bureau. Does requesting my credit report hurt my credit score?; Regulation V medical information rule (vacated 11 July 2025).
- Federal Trade Commission. Section 319 credit report accuracy study, 2013.
- Equifax, Experian and TransUnion. Joint statement on removal of medical collections under $500, 11 April 2023.
- FICO. FICO Score Credit Insights Report, March 2026.
