Is there any part of financial life quite so confusing as credit? Even though we’re always talking about it, and in some way, it always seems to be popping up in our lives and conversations, most people don’t have a truly keen understanding of what exactly the deal is with credit and credit scores. And it’s no wonder – it’s definitely a twisting, winding, multi-layered topic about something which is always changing.

In the spirit of shedding a little clarity on the topic, let’s break down some of the long-standing myths surrounding credit and credit scores…because sometimes the best way to figure out the facts about something is to call out the fiction.

Myth 1: Checking your credit score hurts your credit score

I would really like to hunt down the mean-hearted person who started this rumor and, well, I’m not sure what I would do to them but it would involve a strong talking to! That’s because just about everyone (myself included until I was clued into the truth) seems to believe that if you check your own credit score, it will make it worse. This is simply not true. It has no effect. Case closed.

This is an especially damaging rumor, as it keeps people from having an up-to-date portrait of their credit situation. Too many people only take temperature of their credit score based on whether or not they get approved for purchases, loans, or credit cards. It’s safe (and smart) to proactively check in on your own credit so you can address any problem areas before you are applying for anything.

One thing you don’t want to do, however, is have a buddy at a bank or car dealership check your score for you – this will be viewed as an application check and those can affect your score.

Myth 2: Lower limits equals better credit score

If you’re one of those people who can’t be trusted to have high credit limits without running up excessive debt, then yes, asking for lower limits on credit cards can be a good idea. But in general, lenders look favorably upon applicants who show a greater distance between their credit limits and the amount they’re actually using. So if you can be disciplined enough to not max out your cards, it’s actually a good thing to have high credit limits.

Myth 3: You should carry a balance on your credit cards

The truth here is that most credit reports will reflect your previous month’s statement, since that’s what lenders will send to credit bureaus. So no one is judging how much of a balance you carry. So you might as well go ahead and pay as much of the balance as you can and save yourself from having to take an interest hit.

Myth 4: Closing an account is bad news

This one is tricky because the myth used to be: closing credit accounts will help your overall credit score (which is also super untrue; lenders like to see that you are responsibly handing financial obligations, not avoiding them.) The fact is closing an account won’t result in an immediate hit on your credit report.

That said, there are a few things to consider here: if you’re unhappy in a credit arrangement (lots of stupid fees, bad customer service, or you just don’t need that account anymore) then closing an account isn’t the worst thing in the world. But you do want to make sure that other areas of your credit are in good shape, that the balance is totally paid off, and that you don’t plan to apply for a loan or new credit account anytime soon. If you’re looking to make a large purchase (a house, car, etc.) then it’s a good idea to hold off on closing accounts until after you’ve been approved.

Do you have a good handle on your credit situation?

This is one area where even the most financially savvy people can get bewildered and even a little scared to talk about it! How do you handle your credit report? Do you stay involved and know exactly what lenders are seeing when they pull your score, or do you close your eyes and hope for the best?