There’s a lot of misinformation going around about credit reports and credit scores. At Sarasota Municipal Employees Credit Union, we want our members to have all the facts. Below are some of the most common myths about what affects your credit score.

MYTH: Canceling credit cards will raise your credit score.
FACT: Your credit score is graded heavily on your capacity. Canceling a card will actually lower your capacity, and lower your score, because your total limit has gone down.

MYTH: It’s better to have three different cards with $500 each than $1,500 on one card.
FACT: It doesn’t make a difference. Your score looks at how much you owe. It does not care how many cards you have.

MYTH: A car loan and a credit card are the same thing when it comes to your score.
FACT: Your score hates credit card debt, but auto loans are considered good loans. In fact, taking out a loan on a car you already own to pay off credit card debt will lower your interest and raise your score.

MYTH: Shopping around for a car loan will lower your score.
FACT: They will roll all applications made in a two week period into one for the purpose of your score. Shopping around for the best rate is a good thing.

MYTH: All credit cards affect your credit score the same.
FACT: Cards issued by finance companies such as CitiFinancial, HSBC Finance and Wells Fargo Financial are sub-prime lenders. Having cards with these type of lenders kills your credit score. Many retailers use these companies to provide their store cards, too.