11 Credit Score Myths Debunked: Frequently Asked Questions

Let’s be honest: credit scores can seem complicated. Everyone seems to have advice, but not all of it is true.

Your friend says checking your score will ruin it. Your cousin insists earning more automatically means better credit. Sound familiar?

Let’s break the myths, set the record straight, and understand what really matters when it comes to your credit score.

Welcome to our ultimate guide where we explore 11 Credit Score Myths Debunked — your go-to FAQ!

Top Credit Score Myths Debunked

Now, we will begin with credit score myths debunked. We will go through 11 myths and identify which myths are true and which are false.

Q1. Your CIBIL score reduces every time you check it. True or False?
False.
This is one of the most common myths! Checking your CIBIL score yourself is called a soft inquiry and it does not impact your score.
In fact, regularly monitoring your score is a smart move.

Q2. Is it safe to check CIBIL score on GPay? True or False?
True.
Checking your CIBIL score on GPay is safe. GPay uses verified APIs to fetch your credit report securely.
But remember, always make sure you’re using the official app and not clicking suspicious links.

Q3. The more you earn, the higher your CIBIL score gets. True or False?
False.
Your income level has no role in calculating your CIBIL score. The score relies on your credit history, not your earnings.

Q4. The CIBIL score is not the only credit score in India. True or False?
True.
While CIBIL is the most well-known, other credit bureaus like Experian, and Equifax also provide credit scores.

Q5. Your CIBIL score will reduce every time you take a new loan. True or False?

False.
Taking a new loan does not reduce your score. However, applying for many loans in a short period might lead to multiple hard inquiries, which can affect your score slightly.
Note: If you manage your new loan responsibly, it can even help boost your score.

Q6. A bounced cheque will reduce your CIBIL score. True or False?
False.
CIBIL prioritizes credit-related transactions compared to banking transactions such as cheque bounces.

Q7. A good CIBIL score is not a certain guarantee that you will be approved for credit. True or False?
True.
A good CIBIL score does not guarantee approval for credit. Lenders may still reject your loan or credit card application based on your income, employer, or current debt levels.

Q8. A large savings account balance does not have any impact on your CIBIL score. True or False?
True.
Your savings balance doesn’t affect your credit score. Your CIBIL score purely reflects how you handle credit, not how much savings you keep in the bank.

Q9. Closing old credit card accounts will definitely decrease your CIBIL score. True or False?
False.
Closing an old card might decrease your credit score significantly. Especially if it’s your oldest credit line (which helps with credit history length).

Q10. Even a few late payments will affect your CIBIL score. True or False?
True.
Nevertheless, a few late payments may lower your credit score. Your payment history contributes significantly to your credit score. So, always attempt to pay on time, even if it means paying a small amount.

Q11. How frequently is your CIBIL score recalculated? True or False?
True.
CIBIL scores are updated in 30 to 40 days. These days, CIBIL receives data from lenders.

Dos & Don’ts of Credit Card

Now that we have credit score myths debunked, let us look at credit card do’s and don’ts before you consider buying it.

Do’s:

• Pay your credit card bill on time — always!

• Review your credit report at least once every month.

• Try to pay more than the minimal amount needed.

• Pay no more than 10% of your income.

Don’ts:

• Don’t apply for too many cards or loans in 6 months.

• Don’t use credit as a substitute for income!

• Don’t close your oldest card without a good reason.

• Don’t max out your credit limit — ever.

• Stay away from cash advances.

Best Practices for Credit Card Use

If you are struggling to use a credit card, below we have mentioned the best practices for credit card use. Follow these practices and start using them with ease.

• Build your credit history: Always, keep a long-term relationship with your credit card. It helps build your credit score.

• Diversify credit: Having a mix of credit cards and loans (secured + unsecured) is a great practice.

• Keep track: Use budgeting apps or reminders to never miss your due date.

• Know your rewards: Use your credit card’s perks like cashback, points, or lounge access smartly.

Conclusion

There you go — 11 Credit Score Myths Debunked! We hope this helped you clear up confusion and become more confident about managing your credit.

Remember, a credit score isn’t just a number — it’s your financial fingerprint.

Knowing how it works helps you make smarter money moves.

Do you have more questions about credit health? Ask away — we’re here to simplify finance, one myth at a time.

Also read: 10 Tips to increase your CIBIL Score