Your credit score has a bigger impact on your life than most people realize. It doesn’t just decide whether you’re approved for a mortgage; it can affect your interest rate, monthly payments, refinancing options, and even how much home you can afford.
And yet, many Canadians still make credit decisions based on myths, outdated advice, or half-truths picked up from friends, family, or the internet.
Let’s clear the air. Here are the most common credit score myths, and what actually matters if you want better mortgage options and lower borrowing costs.
Myth #1: “Checking Your Credit Score Lowers It”
This is one of the most common (and costly) misunderstandings.
The truth: Checking your own credit score does not hurt it at all.
When you check your credit through Equifax, TransUnion, or a legitimate app, it’s called a soft inquiry, and lenders never see it. Monitoring your credit actually helps you spot errors early and stay in control.
What affects your score?
Hard inquiries, like when a lender pulls your credit for a loan or credit card application.
Tip: Always review your credit before applying for a mortgage so there are no surprises.
Myth #2: “You Need Perfect Credit to Get a Good Mortgage Rate”
Many Canadians delay buying or renewing because they think their credit isn’t “good enough.”
The truth: You don’t need an 850 score to access competitive mortgage rates.
In most cases:
- A score in the mid-700s already puts you in a strong position.
- The difference between a 760 and an 820 is often minimal.
- Lenders care about patterns, not perfection.
What matters more than a flawless score is how you manage credit over time.
Myth #3: “Closing Old Credit Cards Improves Your Score”
This one surprises many people.
The truth: Closing old accounts can actually hurt your credit score.
Why?
- It reduces your credit history length
- It increases your credit utilization ratio (how much of your available credit you’re using)
If an old credit card has no annual fee and you manage it responsibly, keeping it open can actually help your score.
Myth #4: “Carrying a Balance Helps Build Credit”
This myth has probably cost Canadians millions in unnecessary interest.
The truth: You do not need to carry a balance to build credit.
What helps your score:
- Using credit regularly
- Paying it on time
- Keeping balances low
Paying your credit card in full every month shows lenders you’re responsible, without paying interest you don’t need to.
Myth #5: “Missed Payments Don’t Matter After a Few Months”
Unfortunately, credit memories are long.
The truth: A missed payment can stay on your credit report for up to six years.
Even one late payment can:
- Lower your score significantly
- Increase your mortgage rate
- Reduce lender options
The good news?
Consistent on-time payments over time can gradually rebuild your score, but prevention is always easier than recovery.
Myth #6: “All Debt Is Bad for Your Credit”
Not all debt is created equal.
The truth: Lenders like to see a healthy mix of credit, such as:
- Credit cards
- Lines of credit
- Car loans or student loans
This shows you can manage different types of borrowing responsibly. The key is balance and consistency, not avoiding credit entirely.
Myth #7: “Rent Payments Don’t Help Your Credit”
This one is partially true, but changing.
The truth: Traditionally, rent didn’t appear on credit reports. Today, some services and lenders can factor rent history into credit assessments.
Even when rent isn’t reported directly, strong banking behaviour and payment consistency still matter when lenders assess your overall profile.
Why This Matters When Getting a Mortgage
Your credit score directly affects:
- Your interest rate
- How much do you qualify for
- Whether you’ll need default insurance
- The lenders and mortgage products available to you.
At Cannect, we look beyond just a number. We help you understand how your credit profile fits into the bigger picture, and how to position yourself for the best possible outcome.
Final Thought
Credit scores don’t have to be mysterious or stressful. Once you separate fact from fiction, you can make smarter decisions and save real money over the life of your mortgage.
If you’re planning to buy, renew, or refinance and want clarity around your credit, talk to a mortgage expert before making a move. A small adjustment today could mean thousands saved tomorrow.