October may be a time for spooky surprises, but your credit shouldn’t be one of them. Misunderstanding how credit works can lead to unnecessary stress, especially if you're trying to improve your financial standing.

To help you stay on track, we’re clearing up three common credit myths that can hold you back. Let’s get into the facts, so you can take control of your credit with confidence.

Myth #1: Closing old credit accounts will boost my credit score

🔎 Truth: Closing old credit accounts can actually hurt your credit score! Why? Because part of your credit score is based on the length of your credit history and the amount of credit available to you. By closing an old account, you’re shortening your credit history and lowering your available credit, which can negatively impact your score.

🔑 Key to success: Review the terms of your card. Does it come with an annual fee? If not, it’s better to keep the account open. Even if you don't use the card often, it helps to maintain a longer credit history. If it does have fees, consider if you need the card.

✨ Pro tip: Avoid relying on high-interest credit cards by taking advantage of employer-sponsored benefits like earned wage access. That way, you won’t need to reach for that credit card in a pinch.

Myth #2: Checking my credit score will lower it

🔎 Truth: Checking your own credit score, known as a soft inquiry, does not affect your score. The confusion often comes from hard inquiries, which happen when a lender checks your credit as part of a loan or credit card application. Too many hard inquiries can ding your credit, but simply checking your own score or researching rates won’t cause any harm.

🔑 Key to success: It’s a good idea to check your credit score occasionally, especially through reliable apps like FICO, so you can stay on top of any unexpected changes or suspicious activity.

✨ Pro tip: Applying for an advance through Exhale? Rest easy—our application process only includes a soft inquiry and doesn’t impact your credit score.

Myth #3: I can’t build credit without taking on debt

🔎 Truth: There are many ways to build credit without sinking into debt. While it’s true that responsible use of credit can improve your score, you don’t need to rack up debt to do so. Credit bureaus primarily look at your payment history, which means early or on-time payments on small balances are enough to boost your score.

🔑 Key to success: Here are some ways to build credit responsibly:

• Pay rent on time. If your landlord provides your rent payment history to credit reporting bureaus, it can help you build credit.
• Become an authorized user on a trusted family member’s credit card. This will add the card's payment history to your credit, without requiring you to use or pay back a credit card of your own.
• Apply for a secured credit card. These types of cards typically require a (refundable) security deposit and come with lower credit limits, and are designed to help you build credit safely.

✨ Pro tip: If you are applying for a credit card or loan, be sure to review the fine print for high interest rates and late fees, which can cause your debt to increase exponentially if you miss a payment.

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Don’t let credit myths scare you away from building a solid financial future. By understanding how credit works, you can avoid common pitfalls and make smarter financial decisions.

Whether you’re managing your credit score or exploring new ways to build it, remember that knowledge is power. Stay informed, stay proactive, and you’ll be in a great position to shape your financial journey—without letting misinformation slow you down.