Consumers are often confused about factors affecting credit scores, myths debunked.

From Yahoo Finance: 2025-06-27 15:52:00

Consumers are often confused about what factors into their credit scores, with many myths circulating. The key information that impacts credit scores includes managing credit cards, loans, and unpaid bills turning into debt. Personal details like demographic information do not affect credit scores, as they are not factored in the calculation. Pulling your own credit reports does not harm your scores and is essential for maintaining good credit. Applying for credit cards and loans can impact scores, with hard inquiries resulting in a minor decrease in points. Negative information is removed from credit reports after seven years, except for Chapter 7 bankruptcy. The five categories used to calculate credit scores include payment history, amounts owed, length of credit history, new credit, and credit mix. Contrary to popular belief, there is no specific threshold for credit card balances to maximize scores, but keeping balances low is beneficial.



Read more at Yahoo Finance: 8 factors that don’t affect your credit scores