Myth 1: Closing Old Credit Cards Helps Your Score
This is one of the most persistent myths out there. Closing a credit card actually hurts your score in two ways: it reduces your total available credit (increasing your utilization ratio), and over time, it removes the account's history from your report. If you have a card you don't use, keep it open, just don't carry a balance.
Myth 2: You Need a 750+ to Buy a Home
Not even close. Conventional loans are available starting at 620. FHA loans go as low as 580 (or 500 with 10% down). VA loans have no official minimum, and some lenders go down to 500 with compensating factors. The score you need depends on the loan type, and a good broker can help you find the right program for wherever you are right now.
Yes, a higher score gets you a better rate. But waiting years to build a perfect score while rent prices climb and home values appreciate often costs more than the rate difference you'd save.
Myth 3: Checking Your Own Credit Hurts Your Score
Checking your own credit is a "soft inquiry" and has zero impact on your score. Check it as often as you want through services like Credit Karma, your bank's free credit monitoring, or AnnualCreditReport.com. The only inquiries that affect your score are "hard inquiries" from applying for new credit, and even those only drop your score by a few points temporarily.
Myth 4: Paying Off Collections Immediately Boosts Your Score
It depends. On newer scoring models (like FICO 9 and VantageScore 3.0), paid collections are ignored. But on FICO 8, which most mortgage lenders still use, a collection has the same impact whether it's paid or unpaid. In some cases, paying an old collection can actually reset the "date of last activity" and temporarily lower your score. Always talk to your loan officer before paying off collections during the mortgage process.
Myth 5: Your Income Affects Your Credit Score
Your income does not appear anywhere on your credit report and has zero impact on your score. Credit scores are based entirely on how you manage debt, payment history, amounts owed, length of history, new credit, and credit mix. A person earning $40,000 can have a higher credit score than someone earning $400,000. They're completely separate things.
What Actually Moves the Needle
If you're looking to improve your score before applying for a mortgage, focus on these three things: pay every bill on time (payment history is 35% of your score), keep credit card balances below 30% of your limits (ideally below 10%), and don't open new accounts. Those three actions alone can move your score significantly in 60-90 days.