Credit scores are widely misunderstood — and the myths around them can cost you real money in higher interest rates, rejected loan applications, and missed opportunities. Let's clear the record.
Myth 1: Checking your own score hurts it
False. Checking your own credit score is a "soft inquiry" and has zero impact on your score. Only "hard inquiries" — when a lender checks your score for a loan application — can temporarily lower it by a few points.
Myth 2: Closing old credit cards improves your score
Usually false. Closing an old card reduces your total available credit, which increases your credit utilisation ratio — a key factor in your score. Keep old cards open (even if unused) unless they have high annual fees.
Myth 3: You need to carry a balance to build credit
False. Paying your full balance every month is the best thing you can do for your credit score. Carrying a balance only means paying interest — it doesn't help your score.
Myth 4: A higher income means a higher score
False. Income is not a factor in credit score calculations. Your score is based on payment history, credit utilisation, length of credit history, credit mix, and new inquiries.
The one thing that matters most
Payment history accounts for 35% of your CIBIL score. Pay every bill, every EMI, on time — every time. Everything else is secondary.