In recent years, I’ve been really focused on bringing credit education to consumers. It’s a popular time to be thinking about improving our credit scores and how to take advantage of credit to accomplish goals, with interest rates at still-historically low levels and consumers feeling more confident about their personal finances and jobs.

In general, we’re feeling better about our futures (at least in the short-term) and that’s motivating us to think more seriously about achieving goals – whether to buy a home, start a business, go back to school or all of the above. And many big goals carry big price tags, the sort that might warrant the use of credit.

Yet at the same time, there’s a serious lack of knowledge of how credit scores get calculated and when and how credit plays a role in one’s financial life. A new survey by the Consumer Federation of America finds that many of us still don’t understand the details surrounding credit scores.

I’ve also witnessed a similar pattern in examining people’s credit habits and behaviors over the past two years in partnership with the team at Chase Slate.

Through our observations and work together, I’ve learned about some of the specific misconceptions. Many of us are also pretty unhappy with our credit ratings. A survey Chase Slate did this year found that one-third of Americans are dissatisfied with their credit score and 28% say they aren’t confident their current score can help them accomplish their goals. Both of these stats show an increase from last year.

But, really. Can you blame us?

There are definitely some distorted facts out there. And with so much financial illiteracy in schools, consumers are learning the hard way in the real world about how credit really functions – and why it matters for our bottom lines.

Here are 6 top credit myths I come across frequently – debunked.

Myth #1: Checking my report will lower my score.

There’s some misunderstanding around the impact of checking credit score and/or reports. It is true that if a lender or card company checks your credit, as part of evaluating your application for a loan or card, the inquiry is considered a ‘hard inquiry’ and can have a negative impact on your score. But when YOU check your report, this is recorded as a “soft inquiry,” and does not impact your score. Bottom line: You can check your report as often as you like, worry free.

Myth #2: It’s not a good idea to pay off my balance every month.

I heard this fallacy in my young adult years and it continues to come up in conversations today. Some individuals – for example, a couple listeners of my podcast – have written in and said they’ve heard it’s better to carry a monthly balance on your credit card bill. They think it’s a way to increase your credit score. While it is true that you should “use” your credit card responsibly to establish strong credit, some mistakenly think that means you should “use” the card by “carrying a balance,” because that shows “activity.” The truth is that it’s best to pay off your card in full – and on time – each billing cycle. Otherwise, you end up paying interest. Carrying a balance can also negatively impact your credit score. Your debt to credit ratio is 30% of your credit score. The lower your debt level, the lower your ratio can be. And that is, ultimately, better for your score.

Myth #3: My age and income impact my credit score.

False and false. It is true that the longer your credit history is, the better it is for your credit score. But your age, on its own, is not what matters. Someone who’s 85 years old who just opened up his first credit card won’t necessarily have a higher score than someone who’s 30 years old with a ten year history of managing credit. In fact, the person with the decade-long credit history – all other factors equal – would presumably have the higher score. [The length of your credit history is equal to 15% of your credit score.] And it may be true that those with higher incomes can better afford to stay out of debt – which, in turn, keeps the credit score in good shape. But neither variable directly impacts your credit score.

Myth #4: You can get a free credit score and credit report each year for free.

It is true that the law requires us to have free access to our credit reports once a year, but not credit scores. Again, because the terms “score” and “report” get used interchangeably from time to time, we think they’re one and the same. Your score is a three-digit number (between 300 and 850) that takes into account the details on your credit report such as your payment history, length of credit history and the variety of credit you have. You can receive your free credit report by visiting www.annualcreditreport.com. There you can access one free annual copy of your report from each of the three major credit-reporting agencies – Equifax, Experian and Transunion.

Myth #5: My boss can check my score.

This is one of the most widely misreported details about credit scores I read about and hear from consumers. While some employers do ask for your permission to conduct a credit background check as part of the application process [and they must get your approval ahead of time], they’re only reviewing your credit history — not your credit score. The terms credit “report” and credit “score” sometimes get used interchangeably, as if they’re the same thing. They’re not!

Myth #6: My credit only matters when I’m applying for a loan or credit card.

Plan to rent an apartment? Sign up for high speed Internet at home? Apply for a job? Your credit can play a pivotal role in many scenarios outside of applying for a loan or credit card. Landlords can ask to review your credit history before agreeing to lease you an apartment. They, of course, want to make sure that you are financially responsible and tend to pay your bills on time. Your cable or utility company also wants to be sure you don’t have a pattern of paying late – or never. And as we already covered, some companies that work with valuables or large sums of money (think: banks, jewelers, etc.) like to take a peek at your credit history to see if you might be financially stressed. If you are, that may be seen as a hiring risk.

Have a question for Farnoosh? You can submit your questions via Twitter @Farnoosh, Facebook or email at editor_mint@intuit.com.

Farnoosh Torabi is America’s leading personal finance authority hooked on helping Americans live their richest, happiest lives. From her early days reporting for Money Magazine to now hosting a primetime series on CNBC and writing monthly for O, The Oprah Magazine, she’s become our favorite go-to money expert and friend.

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