There are some myths about building our credit that have been around for way too long. Unfortunately, these un-truths can really damage our personal finances and leave us desperate for a quick fix.

It’s important to identify this misleading information and understand why it’s wrong. The truth can support our strong financial growth and set us on a path to success.

Here are five myths about building your credit that keep coming up time and time again.

It Helps to Carry a Balance Each Month

A truly damaging myth about building your credit is that you need to carry a balance on your credit card each month. This not only is untrue, but it leads to unnecessary high interest payments to your credit card company each month. With the average credit card interest rate for new offers hovering close to 20%, this practice can leave you paying an arm and a leg.

Instead of carrying a balance or paying the minimum on your card each month, it’s highly recommended to pay your balance in full. This practice helps you control your spending, live within your means and, surprisingly, will increase your credit score. One of the major factors in increasing your credit score is keeping your credit utilization low. When you pay off your balance in full each month, you’re decreasing your overall credit utilization thus increasing your score.

You Need a Credit Card to Improve Your Credit Score

While it’s true that you need some type of loan to have a credit score, it doesn’t have to be a credit card. Money Coach Whitney Hansen suggests you first assess your situation and see what other loans you currently have. You may have a student loan, a car loan or even medical debt. When you pay those bills on time and in full, you will be increasing your credit score…without a credit card.

If you already have a card, Hansen has one hack that helps you keep your spending in check and grows your score as well. Hansen suggests putting a recurring fee on your card like Netflix, Hulu or Spotify – something with a low monthly cost that you’re already paying for. Set up an automatic payment every single month from your checking account to your credit card account. This way, you’re paying it off automatically each month. Then take that card and cut it up or put it in water and freeze it in your freezer. That way, you never use it again, but you’re building up your credit score.

This strategy evidently has the same effectiveness as a credit card account with a $5,000 balance on it. Hansen swears by this tip and consistently suggests it to her clients.

Closing Credit Card Accounts Will Improve Your Credit Score

Paying off and closing credit card accounts can be a great thing, but surprisingly this can negatively affect your credit score. A portion of your credit score is determined based on your average account age. If you decided to pay off and close a credit card you’ve had for five years and the other accounts in your credit report have only recently been opened, your average account age is going to look a lot younger.

While younger can be better with a lot of things, credit age is not one of them.

Since credit age only accounts for 15% of your overall score, don’t feel too bad if you’re paying off and closing up your debt accounts. By paying your other bills on time and in full, you’ll build your score back up in no time.

Your Score Decreases When You Check Your Credit

Checking your credit is a smart move and it does not negatively or positively affect your credit score. These types of inquiries are neutral actions that leave your score unchanged.

In fact, checking your credit is a smart financial habit. This helps you review your current debts and any disputes you may have over a closed account or potentially one that was fraudulently opened.

When you apply for credit and the lender needs to do a “hard inquiry” on your credit report, this may hurt your score. Just know that there is a big difference between you checking your credit and you applying for credit.

You Can Pay an Agency to Improve Your Credit Score Fast

Unfortunately, improving your credit score is not a quick process. In fact, any company claiming that they can make your credit score rise-up fast is probably taking you for a ride.

Increasing your score all comes from working on the following actions:

Paying Your Bills on Time and in Full

This incredibly important life skill accounts for 35% of your credit score. By ignoring Myth #1 above, you’ll not only grow your credit score, but you’ll keep more of your money by lowering your interest payments.

Keeping Your Credit Utilization Low

30% of your credit score is determined by how much of your available credit is being used. Keep this utilization percentage low and your score will increase.

Increasing Your Average Account Age

The older…the better. Consider keeping an account open with a very low recurring balance that you automatically pay off each month.

The Myths Just Keep on Coming

Unfortunately, these five myths are just the beginning of a long string of misleading information out there about your credit score. Your spouse, your employer and even your self-worth can get tangled up in these credit score myths.

A great way to track your credit score growth is with the new Rocket HQ app. Not only does the app help you track your score, it gives you helpful tips on how to increase it. This way, you can dispel the myths before your very own eyes. And then with your new future high credit score, you’ll definitely know the difference between truth and fiction.

What myths have you heard about building your credit score? Please let us know about them in the comments below.

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