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9 Myths on How to Build Better Credit

picture of a credit report and an eraser

Shawna Faith Thompson, Financial Capability Educator

Like child-rearing and curing ailments, credit building is chock-full of old wives' tales that don't pan out. Smart financial moves such as closing accounts or paying off loans early may not be the credit boosters you think they are. Sadly, there are no real quick fixes despite what some commercials or online credit repair ads might proclaim. The key to increasing your credit score is good payment behavior along with time and a healthy mix of credit types.

  1. It helps to opt out of credit card offers. Many consumers assume if they opt out of credit card offers, there will be fewer credit inquiries on their credit reports, says John Ulzheimer, the owner operator at The Ulzheimer Group and former president of consumer education at CreditSesame. However, he says those inquiries are considered "soft" inquiries and don't affect your credit score. You can keep the offers coming if you'd like, but doing so won't help you build better credit. If you want to opt out of offers to reduce your junk mail, call toll free (888) 5-OPT-OUT, or (888) 567-8688, or visit to remove your name from the credit reporting agency lists for unsolicited credit and insurance offers. That will remove your name for 5 years. To keep your name off the list, mail in the permanent opt-out election form available on the website. Consumers can also opt in on the website if they've already opted out.
  2. You can bump hard inquiries off report. A "hard" inquiry is generated when creditors pull your report or score after you apply for a loan or line of credit. Your score falls because it shows you're interested in taking on more credit and therefore, more risk. Other inquiries are considered "soft," such as those triggered by you, your employer or companies sending credit card offers in the mail. Some consumers believe if they pull their credit report every day to load up on "soft" inquiries, they will bump off the hard ones that weigh on their credit score. "It's speculative. There's no indication there's a finite amount of space for inquiries," says Ulzheimer. And it's only a small part of the score. "There's better bang for your buck if you do more legitimate things."
  3. Closing old accounts boosts your score. This is a hard-to-kill-off myth. Closing accounts typically will not help your score and could possibly dent it, says Trey Loughran, chief marketing officer at Equifax. The results can shorten your credit history eventually and leave you with a smaller amount of available credit, both of which can harm your efforts to build better credit. The length of credit history shows how seasoned of a borrower you are, so the more positive experience you have, the better. Having more available credit helps to keep your utilization rate low. The utilization rate is how much available credit a borrower uses; the lower the percentage, the better. "Say you have $100 in debt with $1,000 in allowable credit across multiple accounts and you close a credit card with a limit of $500, then you doubled your utilization rate from 10% to 20%," Loughran says.
  4. Multiple accounts improve your score. Some consumers with credit problems believe opening many accounts will be proof that they can handle credit. Actually, it has the opposite effect. "That makes lenders scratch their heads and wonder why you need all that credit," says Rod Griffin, director of public education at Experian. "It's a sign of risk." Your credit score can suffer as a result. What lenders will see is a boatload of new, hard inquiries on your credit report. Those inquiries will deduct from your credit score, while lenders will worry that you are in dire financial straits and desperately need access to credit to make ends meet.

Read five more myths how to build better credit at 9 myths on how to build better credit.


Shawna Thompson
Extension Educator, Financial Capability
(952) 466-5317


Herron, J. (2017). 9 myths on how to build better credit. Bankrate.

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