NEW YORK (MainStreet) — Americans still seem to be scratching their heads over their credit scores.

Sure, they recognize that a healthy FICO gives them easier access to credit, and at lower interest rates — a huge pocketbook issue for consumers — but are less sure how their credit score is calculated and what factors help or hurt it.

Take a survey from TransUnion revealing "significant consumer confusion about what affects credit scores and what's included in credit reports." Surprisingly, the survey says, "the confusion is strong even among those who regularly check their credit." 

Consider these study takeaways:

  • Nearly half falsely identified rent (45%) and cellphone (47%) payments as affecting their score directly, but these aren't regularly reported to credit bureaus. Even 49% of those with "excellent credit" mistakenly thought rental payments are included in their report. 
  • More than half of respondents (55%) who checked their credit report in the past 30 days mistakenly believe their full employment history and income level (41%) are included.
  • Some 40% of respondents who've never checked their report are unsure how checking it affects their score, while 20% thought it would lower it. Actually, "soft inquiries" don't affect the score.
That lack of knowledge about what affects credit scores can be dangerous, TransUnion says, noting "myths" consumers lean on when making financial decisions.

For instance, many Americans think closing old or inactive accounts will help a credit score, "but this might actually have the reverse effect, because it can shorten the duration of your credit history," the credit agency giant says.

Another myth "many people are beginning to believe is that 'credit cards will not help your credit score,'" says Jaquetta Turner, a credit card consumer and founder of the website, a personal wellness platform. "Credit cards are still a great way to build your credit score if you have self control and will only spend what you can pay off within one to three months. My credit score went from 540 to 798 by properly using credit cards."

"The one I hear all the time is: 'Carrying a balance on your credit cards helps build credit history, so you should roll a balance over every month,'" says Bryan Marsden, founder of the website "That is false. You do need to use your cards, but you shouldn't ever carry a balance on them if possible. It doesn't help you build your credit score … all it does is cost you interest on your rolling balance from month to month."

Nick Clements, a former banker and founder of, agrees it's flat-out wrong.

"It may have started by someone saying, 'Don't pay off your credit card until your credit card company sends you a bill. Paying it off early doesn't help your score.' And it morphed into, 'Don't pay off your entire bill, it will help your score.' … Each month you should pay your credit card bill on time and in full. If you can't afford to pay off the balance in full, then pay at least the minimum on time. Never miss paying at least the minimum because missing a payment — even by a day — can cause major damage to your credit score.

Another myth: Poor credit can't prevent you from getting hired. Actually, it can, says Kevin Gallegos, vice president of Phoenix, Ariz., operations for Freedom Financial Network. "Federal law allows potential and current employers to view a modified version of a candidate's credit report for employment purposes, such as hiring and promoting, but the decision to include a credit check is left up to the individual employer," he says. "In certain industries, knowing that a candidate has a sound credit history is a very important part of the hiring and screening process and can help in preventing application fraud."

— Written by Brian O'Connell for MainStreet