Common gossips about credit score

6 Most Common Myths About Credit Cards

Gather around folks, as we are here to debunk some of the common gossip about credit cards. Sadly, there are no classes to give us a clear understanding of credit scores. As a result, the misinformation that is spreading is believed.

Don’t stress if you are finding it difficult to figure out which news to trust, as we are ready to spill the beans and break the gossip around credit cards once and for all.

With Kotak811, you can open zero balance account online from the comfort of your home.

The more you spend the more is your credit score

This couldn’t be further from the truth. The more you use your credit card, your bank might increase your credit limit. But too much credit will lead to high exposure to debt. And not paying your credit card debt on time will have a negative impact on your credit score.

Also Read: How Credit Card EMI Works

Let’s face it, spending is in no way improving your credit score; rather, you should focus on credit utilization. Credit utilization is how much credit you are using at a time, and it does affect your credit score. Never max out your credit limit, and try to utilize around 30% of your credit limit.

Checking your credit score will lower it

Does checking your credit score actually lower your credit score? No. Checking a credit score is known as an "inquiry." You must have heard that inquiries are bad for your credit score. That’s not the case; inquiries are only bad when they are related to a new credit card application, and that too on a frequent basis.

Also, there are two types of inquiries:

A hard inquiry takes place when a lending organization checks your credit report during a new credit card application. It might negatively impact your score if you have applied for too many credit cards at the same time.

When you check your credit score for audit purposes, such an inquiry is known as a "soft inquiry" and is pretty harmless.

Closing a credit account is good for your credit score

Again, this is a very wrong thing to follow. When you close a credit card, your available credit limit goes down, which means your credit utilization will likely go up, lowering your credit score. Also, you are deleting valuable credit history.

Yes, you should pay your credit card bills on time, but consider keeping your old credit card account open when the balance is paid off.

Your income impacts your credit score

Your credit score is irrelevant when it comes to your income. Your income defines the credit limit the lending institution will approve on your credit application. But it has nothing to do with your credit score.

Your income will impact your ability to pay back your loan, but it is not recorded in your credit report.

You need credit to get credit

Though it is true, it is not entirely true if you are someone who is new to credit. As a new lender, you will not have any existing credit history, and in that case, your employment will come in handy if you are looking for a loan or a credit card. The lending institution will sanction your application based on your monthly income.

There is another way to apply for a credit card without having a credit score. A credit card backed by an FD is a secured card that requires collateral but no credit score. The money lying in the FD account serves as the security against which the credit card is issued. The credit limit is usually 80% to 90% of the FD amount.

Kotak811 #DreamDifferent credit card is one of the best available FD backed credit cards in the Indian market. You can open an FD account to get the card. The credit limit is 90% of the FD amount. Also, it is a lifetime free credit card, and you don’t have to pay any joining fees as well.


We hope we have cleared up some of the most common gossips about credit cards. So next time when you look to apply for a credit card, you will have a clearer picture.