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If you’ve recently submitted an application for a new credit card, the issuer is focusing on one key piece of information to determine whether to approve or deny your request: your credit score. The three-digit figure gives financial institutions a picture of your financial history, your current load of debt, and your probability to pay off purchases on a new card. There are a number of different types of credit scores, but the FICO score, which ranges from 300 to 850, is the most-widely recognized figure. Last year, the average score clocked in at 700 — respectable but not amazing. If you’re looking to improve your credit and your chances of approval for a new card, make sure these false beliefs aren’t playing a role in your personal financial management.

Incorrect Assumption #1: Your Age Impacts Your Credit Score

Your age doesn
Your age doesn’t matter when calculating your credit score. The age of your accounts does. Image courtesy of Burak Karademir via Getty Images.

In a recent survey conducted by the Consumer Federation of America and VantageScore Solutions, more than 40 percent of respondents believed that their age played a role in calculating their credit score. While it is true that a 50-year-old consumer with a long history of on-time payments has the potential for higher credit than a 20-year-old consumer who just opened his first credit card, it is not a given. And regardless, the number of years you’ve been alive is not part of your credit score. Instead, the number of years that your accounts have been open is a factor.

Incorrect Assumption #2: A Balance Will Give You a Boost

While banks love a customer who forks over extra cash for finance charges, they really love a low-risk customer who pays on time, in full, every month. However, a lot of credit card users think that carrying a balance can actually increase their credit scores. A recent study conducted by revealed that nearly 43 million Americans have carried a balance from month to month, thinking that it could improve their scores. “The fact of the matter is that carrying a balance will never improve your credit,” Matt Schulz, senior industry analyst at, said when the survey findings were released. “With interest rates at an all-time high, cardholders should aim to pay off their bills in full every month, and more importantly, pay on time.”

Incorrect Assumption #3: Closing Cards Will Help Your Score

Before you cut up that old credit card, it
Before you cut up that old credit card, it’s important to know that it might be helping your credit score. Image courtesy of Stella via Getty Images.

Reducing the number of cards in your wallet may seem like a wise move, but closing old cards can backfire. Remember that the age of those old accounts plays a major role in establishing your historical credit performance. Plus, the unused credit in that account helps improve your credit utilization ratio, which is one of the key factors in your credit score. It helps issuers understand your spending amount relative to the amount of credit you have available.

Incorrect Assumption #4: Checking Your Score Will Cost You Cash

Tracking down your credit score used to be challenging, but today, there is no excuse for you to not have an idea of potential lenders look at you. There are plenty of options for getting your score for free. And the number isn’t just going to impact whether you get to open that awesome new rewards card. Utility companies, landlords, and insurance companies all may use the figure in evaluating your as a customer or tenant.

Your personal credit cards aren’t the only pieces of plastic that can impact your financial well-being. Check out “Which Business Credit Cards Could Affect Your Personal Credit?”


Know before you go.

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