Credit score myths that cost Canadians money
Your credit score shapes the rates you are offered on mortgages, car loans, and credit cards — yet a surprising amount of what Canadians believe about credit is simply wrong. Here are the myths worth unlearning, and what actually moves your score.
Myth 1: Checking your own score hurts it
Checking your own credit is a soft inquiry — invisible to lenders and harmless to your score. What dings your score is a hard inquiry, which happens when a lender pulls your file because you applied for credit. Monitor your own score freely; it is one of the best money habits there is.
Myth 2: Carrying a balance builds credit
No. What builds credit is using your card and paying on time — not paying interest. Payment history and utilization are what count. Carrying a balance month to month costs you 20%+ interest for zero credit benefit. Paying the statement in full every month builds exactly the same history.
Myth 3: Closing old cards helps your score
Closing an old card usually does the opposite:
- It shortens your average account age, which can lower your score
- It removes that card's limit from your utilization math, pushing your ratio up
- It reduces your total available credit
Unless a card charges a fee you cannot justify, keep old accounts open with a small purchase now and then.
Myth 4: Your income affects your score
Your salary never appears in your score. Income influences what lenders will approve, but the score itself is built from payment history, utilization, credit age, account mix, and inquiry activity. A modest earner with flawless habits can outscore a high earner who pays late.
Tip: Keep card balances below 30% of their limits — under 10% is even better — and automate full-balance payments. Those two habits do more for your score than any trick.
The bottom line
The formula is boringly consistent: pay on time, keep utilization low, keep old accounts open, and check your report regularly for errors. Ignore the myths, and your score will quietly save you thousands on your next big loan.
This article is for informational purposes only and does not constitute financial advice. Rates and product details change frequently — always compare current offers before making a decision.
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