TikTok Credit Card Myths Are Everywhere. Experts Debunk 6 Common Misconceptions

When it comes to credit and credit cards, there are a few myths that never seem to fade. Many of these misconceptions spring from a general misunderstanding about how credit works, while others are spread on social media platforms like TikTok and X.

If you want to bring your credit score to the next level, you need to know what's true and what isn't. We talked to a few CNET Money experts to help dispel six common myths so you can get the most from your credit tools.

"Applying for new credit cards will significantly lower your credit score."

Verdict: Sometimes true, but mostly overhyped

It's true that applying for a new credit card results in a hard inquiry on your credit reports, and that a factor called "new credit" makes up 10% of FICO scores. However, the impact of applying for a new credit card on your score can sometimes be overstated. You're unlikely to see a huge drop on your credit profile, but you can expect a decrease of a few points. This typically only lasts for a few months.

If you're looking for a new credit card, check to see if the card issuer offers preapproval tools to help you view your approval odds. When you're ready to apply, don't worry about the small temporary credit ding you might experience. Just make sure you don't overdo it and apply for more than one or two cards over the span of a few months.

Exception: If you're in the process of applying for new financing, like a mortgage or home equity loan, you should hold off on adding any new credit accounts to the mix for several months. Applying for new credit could indicate financial challenges and prohibit you from getting approved for a loan -- or result in getting approved with less favorable loan terms.

"Having a lot of credit cards hurts your credit score."

Verdict: Mostly false, but it's worth knowing the pitfalls

Some people believe that having many different credit cards will lower your credit score, but that isn't the case. The factors that impact your credit the most are your payment history (whether you pay bills on time each month) and how much debt you have in relation to your credit limits (your credit utilization ratio). Neither of these factors are directly impacted by the number of cards you carry.

"Multiple credit cards won’t hurt your credit scores. It’s how you manage them that matters," credit expert Gerri Detweiler said. "Pay on time and keep your debt usage low, and your credit scores will benefit."

But she cautioned that opening multiple cards will ding your credit score. If you can, space out your applications by a few months to lessen the impact. That said, opening multiple credit cards in a short period of time can affect your credit scores because your reports will list new accounts, as well as inquiries on the credit reports that were checked.

Having several credit cards can even be a net positive when it comes to your credit utilization ratio. More credit cards can boost your available credit, lowering your credit utilization ratio and boosting your credit score.

But managing multiple credit cards can be challenging. If one payment slips through the cracks, that's what could damage your credit. And if you're using multiple credit cards to finance purchases you can't afford to pay off, then your finances could suffer.

Multiple credit cards won’t hurt your credit scores. It’s how you manage them that matters.

Gerri Detweiler, Expert Reviewer

@yourcreditguy Is there a such thing as too many credit cards? What's "too much" and when do you know you're at your limit? #fyp #subscribe #creditcoach #creditmanagement #creditcards #creditcarddebt ♬ original sound - yourcreditguy

"Checking your credit lowers your score."

Verdict: False

You might've heard that checking your credit score causes your score to drop. You may have also heard that checking your credit reports with the major credit bureaus can negatively impact your score.

Consider this myth busted. You can easily check your credit score through your credit card's portals, like Chase's Credit Journey or Capital One's CreditWise (though neither requires you to be a Chase or Capital One cardholder) or other third-party apps without impacting your credit score.

When you check your own credit, it's considered a soft inquiry, which won't budge your score. Further, you can check your credit reports for free with each of the major credit bureaus -- Experian, Equifax and TransUnion -- with no credit impact weekly at AnnualCreditReport.com.

"Making multiple payments per month will improve your credit faster."

Verdict: A good practice, but this tip is somewhat misleading

This tip is blowing up on TikTok, and while it's somewhat true, you need to understand how multiple payments impact your credit score to reap the benefits.  

Paying multiple times a month in itself won't impact your payment history. Credit card companies report your payments and card status to the credit bureaus only once per billing cycle, and the number of payments you make won't move the needle.

"Paying your credit card bill multiple times in a statement period versus making a single payment won't directly improve your score, but there are some indirect ways this could help," credit expert Julia Menez said. 

However, making multiple payments could help your score by keeping your credit utilization low. For instance, if you use your card weekly and pay it off in full at the end of each week, you're more likely to have a zero (or near zero) balance when your card history is reported -- which can help boost your score.

"If you make multiple payments throughout the month, [your] average [credit card] balance [will be] lower, which would result in a lower credit utilization ratio, which in turn helps your credit score," Menez said.

This tip can also help you stay on top of your credit card payments so that you aren't surprised by your bill at the end of the month. And since credit card interest compounds daily, paying more frequently may also reduce your interest charges if you carry a balance. For example, paying $100 a week for four weeks can save you more in interest than paying $400 at the end of your billing cycle. 

Paying your credit card bill multiple times in a statement period versus making a single payment won't directly improve your score, but there are some indirect ways this could help.

Julia Menez, Credit card expert and host of the Geobreeze Travel Podcast

"Missing a credit card payment will instantly damage your credit."

Verdict: False, but you'll want to act fast to avoid a credit ding.

You might have also heard that forgetting about a credit card payment will immediately damage your credit, but this isn't normally the case. Most late payments won't show up on your credit reports until they are 30 days past due, according to Equifax. This means you may have some time to make up for a missed payment before your credit takes a hit.

That said, you can still be charged late fees if you pay your credit card bill even a single day late. You could also be hit with a penalty interest rate that's higher than the rates you're paying now. For these reasons and others, you'll still want to pay your credit card bill on time each month.

If you are hit with a late payment fee or a penalty APR, contact your issuer to ask if it'll remove it. If it's your first offense the company will likely waive it, especially if you've had a good relationship.

"Carrying a credit card balance helps your credit score."

Verdict: False

You may have heard that carrying a balance on your credit card can help your score more than paying it off each month. Out of all the myths, this is the most dangerous. Carrying credit card debt will not help your score, but it can cost you large sums of money depending on the size of the balance and your card's interest rate.

"Having a high level of debt will hurt your credit score until paid off," credit expert Jason Steele said. "But carrying a balance on a small amount won't affect your credit score. The card issuer reports your amounts owed on your statement and your payment history, but not whether you carry a balance."

Having a credit utilization ratio under 30% can help show lenders you're responsible with credit. However, it's perfectly fine to show a credit utilization of 0%. In fact, paying your credit card balances in full each month is the best way to keep your utilization low and strengthen your scores, according to the Consumer Financial Protection Bureau.

@nicholaskalstek

Is Carrying a Credit Card Balance Good For Credit Score? 🚨

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We have a theory on where this myth may have started. Credit card issuers may close your credit card if there's been no activity for several months. So not using your card at all for multiple months could result in your card being closed, which can hurt your credit score. The easy fix? Add a low-cost, recurring charge to your credit card each month, like a streaming subscription, and enroll in autopay so you never miss a payment, suggested Menez.

"If you want to avoid a card getting closed down to inactivity, I recommend either setting a calendar reminder to charge a piece of candy or something small to the card every few months," Menez said.

Having a high level of debt will hurt your credit score until paid off. Carrying a balance on a small amount won't affect your credit score.

Jason Steele, Credit card expert and founder of CardCon