Most people don't take the proper time to learn about credit and how it works. Yet America is a nation that relies heavily on credit. That dangerous combination, among other reasons, is why there is so much misinformation regarding credit out there.

The number of credit myths circulating on the web is shocking. The fact that some can derail your finances and credit score is worse. Here are some credit myths that you need to stop believing right now.

Myth: You Must Carry a Balance on Your Credit Card to Help Your Score

credit myths debunkedThis is both one of the most common and potentially damaging credit myths around. Holding a credit card balance is not good for you or your credit, it's the exact opposite. Or at least it can be.

30% of your credit score is determined by "amounts owed," according to FICO. What concerns them mostly with this factor is your credit utilization ratio — your credit card balance divided by its limit.

Typically, your credit score can start to be negatively impacted when your credit utilization tops 30% on any line of credit. So, not only will this myth lead to you being charged interest every month, it will also HURT your credit score if your balance(s) get too high.

The truth: To build credit through credit card use, all you need to do is make all of your payments on time and keep balances under 30% utilized. In an ideal world, you're able to pay off all of your credit card balances on time and in full every single month.

Myth: You Only Have One Credit Score

Who knows where these whacky bits of misinformation come from. In reality, if you are an active credit user, it's possible for you to have more than 20-30 credit scores. Allow us to break this down.

For starters, there are three national credit bureaus: TransUnion, Equifax and Experian. These agencies are the ones collecting your information from your creditors and compiling it into your credit reports.

Each bureau will have a credit score for you, but it will be different. This is typically because not all of your creditors report to all three agencies. This means different information appears on your credit reports from each, which leads to a different score.

Then you must consider the sheer number of credit scoring models out there. For example, FICO and VantageScore, two of the most popular credit scores, both have several models in circulation. This means you probably have several different FICO scores that vary — and that's but one of the many scoring models.

The truth: You have many different credit scores attached to your name. This also means that the credit score you see probably isn't going to be the same one a lender evaluating you is going to look at. Keep that in mind the next time you are applying for credit.

Myth: Checking Your Own Credit Hurts Your Credit Score

Checking your credit scores and reports is not an act to be feared. It is one that should be practiced regularly. But it is also easy to see how this rumor got started.

To start, nothing happens when you check your own credit scores. As for credit reports, you are entitled to a complimentary copy from each of the three credit bureaus once every 12 months. These are available at

Checking your own credit reports is known as a "soft inquiry." When a creditor checks your reports when making an approval decision, this is a "hard inquiry." Hard inquiries show up on your credit reports and tend to knock a couple points from your score. However, soft inquiries do not affect your credit score at all.

The truth: You won't be penalized for checking either your credit scores or reports. Therefore, it's smart to regularly check in on your credit. It helps to stay in the know and you can always be on the lookout for errors or signs of identity theft.

Myth: You Can't Get Approved For a Loan with Bad Credit

The truth: You just need to find the people that can help. If your credit is less than perfect and you need an auto loan, Drivers Lane can help. We can connect you to a local car dealership that specializes in helping customers in nearly any credit situation.

Our service is free and it puts you under no obligation to buy anything. Plus, your auto loan can help you build good credit if you simply make all of your payments on time. Get started by filling out our simple and secure car loan request form today.