Your credit score is a three-digit number that represents your creditworthiness and impacts your ability to secure loans, mortgages, and credit cards. It’s important—and because it’s important, many Canadians worry obsessively about factors that don’t actually affect it.
Here’s the truth: You probably worry about more things than you need to.
Many commonly misunderstood actions, life events, and financial behaviors have zero impact on your credit score. Worrying about them wastes your mental energy and can lead to unnecessary financial decisions.
In this blog, we’re busting the myths. Let’s clarify exactly what WILL and WON’T hurt your credit score so you can stop worrying about the wrong things and focus on what actually matters.
Ready to understand what really affects your credit? Learn what factors actually impact your score in our main FAQ
Why Credit Scores Matter (The Quick Context)
Before we bust myths, let’s confirm what we know: credit scores do matter.
Your credit score determines:
- Whether lenders will approve you for credit
- What interest rates you’ll receive
- Whether landlords will rent to you
- Your financial opportunities
- Your ability to qualify for mortgages in Ontario
A higher score (700+) means better rates, easier approval, and more options. A lower score (below 660) means higher rates, more restrictions, and potential denials.
That said: Your score is based on SPECIFIC factors, not everything.
Understand credit score calculation in our main FAQ
8 Things That WON’T Hurt Your Credit Score
#1: Checking Your Own Credit Report or Score
The myth: “If I check my credit score, it will lower my score.”
The reality: Checking your own credit is a soft inquiry and has zero impact on your score.
What’s the difference?
| Inquiry Type | Who Does It | Impact on Score | Visible to Lenders |
|---|---|---|---|
| Soft Inquiry | You | ❌ No impact | ❌ No |
| Hard Inquiry | Lender | ✅ -5 to -10 points | ✅ Yes |
When you check your own credit score through Equifax, TransUnion, or a credit monitoring app, that’s a soft inquiry. It’s private—other lenders can’t see it, and it doesn’t affect your score.
Why this myth exists: People confuse soft inquiries (from checking your own score) with hard inquiries (from credit applications). They’re completely different.
What you should do: Check your credit report regularly. It’s free once a year, and monitoring helps you catch fraud, errors, and improvements.
Learn more about inquiries in our main FAQ
#2: Using a Debit Card
The myth: “If I use my debit card instead of credit, it will hurt my credit score.”
The reality: Debit card transactions have zero impact on your credit score because no credit is involved.
Here’s why:
Debit card:
- Money comes from your bank account
- No borrowing involved
- No credit report tracking
- Doesn’t build credit history
Credit card:
- Borrowing money from the card issuer
- Reported to credit bureaus
- Builds credit history
- Affects your credit score
The problem: If you only use debit cards, you have NO credit history. This makes it harder to qualify for mortgages, loans, and credit in the future.
Why this myth exists: People think “avoiding credit” means “protecting your score.” Actually, credit bureaus need to see you manage credit to build a score at all.
What you should do:
- Use debit cards for daily expenses (safe, no debt)
- BUT also use a credit card for small purchases and pay it off monthly
- In fact, using your credit card for all expenses and ensuring full payment every month is what builds credit while staying away from debt
#3: Your Income or Job Status
The myth: “If I lose my job or my income drops, my credit score will drop.”
The reality: Your salary, job status, or income changes have zero direct impact on your credit score.
What’s NOT reported to credit bureaus:
- ❌ Your salary
- ❌ Whether you’re employed or unemployed
- ❌ Your job title
- ❌ Your income changes
- ❌ How much money you earn
Why income doesn’t affect your score directly: Your credit score measures how you manage credit, not how much money you earn. A millionaire with unpaid debts has a lower score than a modest earner with perfect payments.
But here’s the catch: Income INDIRECTLY matters because:
- If you lose your job, you might miss payments (THAT hurts your score)
- If your income drops, you might not pay bills (THAT hurts your score)
- The score doesn’t drop from job loss, it drops from payment failures
Why this myth exists: People assume “more money = better credit.” It’s not about the amount; it’s about payment consistency.
What you should do:
- Focus on making payments on time, regardless of income
- During job transitions, prioritize bills over other expenses
- Consider payment arrangements with creditors if income drops temporarily
#4: Your Marital Status
The myth: “Getting married will hurt my credit score / Getting divorced will hurt my credit score.”
The reality: Marriage or divorce has zero impact on your credit score.
Here’s what happens:
- Your credit report is individual to you (based on your SIN)
- Your spouse’s credit is separate from yours
- Marriage doesn’t merge credit reports
- Divorce doesn’t change your existing credit report
Important clarification: Joint accounts and co-signed loans ARE connected.
Example:
- You and your spouse open a joint line of credit = reported to BOTH credit files
- You co-sign your spouse’s car loan = that loan appears on YOUR report too
- You have separate credit cards = each reported only to your individual file
Why this myth exists: People think “we’re married now, we’re one financial unit.” Legally and financially, your credit reports remain separate.
What you should do:
- Keep individual credit accounts if possible (builds individual credit)
- Be cautious about co-signing (you’re responsible if they don’t pay)
- Understand that shared accounts affect both credit reports
Learn about credit mix and accounts in our main FAQ
#5: Being Denied for Credit
The myth: “If I apply for a credit card and get denied, my score will drop.”
The reality: Being denied for credit itself does NOT lower your score. But the application does.
Here’s the nuance:
What hurts your score:
- The hard inquiry from your application: -5 to -10 points
What doesn’t hurt your score:
- The rejection/denial itself
Why people confuse this: The application and denial happen at the same time, so people think the denial caused the score drop. It’s actually the inquiry.
Example:
- You apply for credit card with Bank A: Hard inquiry (-5 to -10 points)
- You’re denied: No additional penalty
- You apply to Bank B one week later: Another hard inquiry (-5 to -10 points)
- You’re denied again: No additional penalty
- Total damage: -10 to -20 points from two inquiries, not from two denials
Why this myth exists: People don’t understand the difference between inquiries and denials.
What you should do:
- Only apply for credit you actually need
- Don’t apply to multiple lenders in short time periods
- If denied, wait 3-6 months before applying again (inquiries age and stop affecting score)
Learn more about hard inquiries in our main FAQ
#6: Soft Credit Inquiries (Employer Checks, Insurance, etc.)
The myth: “If my employer checks my credit or insurance company checks my credit, it will hurt my score.”
The reality: Soft inquiries from employers, insurance companies, and others have zero impact on your score.
Who can do soft inquiries?
- ✅ Employers checking background
- ✅ Insurance companies assessing risk
- ✅ Existing creditors reviewing your file
- ✅ You checking your own score
- ✅ Credit monitoring services
None of these appear on your report or affect your score.
Only hard inquiries from LENDERS matter (when you apply for credit).
Why this myth exists: People don’t know the difference between soft and hard inquiries.
#7: Paying Off Old Debt Doesn’t Erase History
The myth: “Once I pay off old debt, it disappears from my credit report and stops affecting my score.”
The reality: Paying off debt is good, but the ACCOUNT HISTORY remains on your report.
Here’s what happens:
- You have a collection account from 2018
- You pay it off in 2024
- Account status changes to “Paid” or “Settled”
- Account still appears on report (stays for 6-7 years from original delinquency)
- Account still shows you had delinquent debt
- BUT the “Paid” status is better than “Unpaid” status
Important: Paying off old debt helps a little (shows you’re responsible now) but doesn’t erase the negative history.
Why this myth exists: People think payment = removal. It doesn’t. But it does show improvement.
What you should do:
- Pay off outstanding debt (it helps)
- Understand it won’t disappear immediately
- Know that age reduces impact, a 5-year-old paid collection hurts less than recent one
#8: Interest Rate Changes or Market Conditions
The myth: “If interest rates go up / housing market changes / economy shifts, my credit score will automatically change.”
The reality: External economic factors have zero direct impact on your credit score.
What doesn’t affect your score:
- ❌ Interest rates rising or falling
- ❌ Housing market changes
- ❌ Stock market performance
- ❌ Inflation
- ❌ Economic recessions
- ❌ Bank’s internal policy changes
Your score only changes when:
- ✅ Your payment status changes (you’re late or on-time)
- ✅ Your balances change (you pay down or charge up)
- ✅ New accounts open or old ones close
- ✅ New inquiries appear
- ✅ Derogatory marks are added or removed
Why this myth exists: People conflate “my financial situation got worse” with “my credit score changed.” Economic hardship CAUSES payment problems, which THEN lower your score. But the economic factor itself doesn’t.
What you should do:
- Protect your employment and income (so you can keep paying)
- Don’t panic about market conditions affecting your score directly
- Focus on what you control (payments, balances, inquiries)
What ACTUALLY Matters: The 5 Real Credit Score Factors
While we’ve busted myths about what doesn’t matter, let’s confirm what DOES:
The FICO Formula (What Really Affects Your Score)
| Factor | Weight | Impact |
|---|---|---|
| Payment History | 35% | Do you pay on time? |
| Credit Utilization | 30% | How much credit are you using? |
| Length of History | 15% | How long have you had credit? |
| Credit Mix | 10% | Do you manage different credit types? |
| New Inquiries | 10% | How many recent credit applications? |
That’s it. Those 5 factors determine your score. Everything else is noise.
Focus on:
- Pay every bill on time (35% of your score)
- Keep balances low (30% of your score)
- Keep old accounts open (15% of your score)
- Manage multiple account types (10% of your score)
- Limit new applications (10% of your score)
Learn more about these factors in our main FAQ
Frequently Asked Questions
Use this simple test:
- Does it involve credit (borrowing money)?
- YES → Might affect your score
- NO → Won’t affect your score
Examples:
| Scenario | Does It Involve Credit? | Effect on Score |
|---|---|---|
| You pay a utility bill | No | ❌ No effect |
| You apply for a credit card | Yes | ✅ Hard inquiry (-5 to -10 pts) |
| You check your own score | No | ❌ No effect |
| You take out a student loan | Yes | ✅ New account, inquiries |
| You switch jobs | No | ❌ No effect |
| You pay off a credit card | Yes | ✅ Utilization improves |
| You move to a new address | No | ❌ No effect |
| You co-sign a loan | Yes | ✅ Account appears on your report |
Rule of thumb: If money didn’t have to be borrowed (you didn’t use credit), it doesn’t affect your credit score.
No. Your credit score recovers over time.
Recovery timelines:
| Problem | Time to Recover | How to Speed It Up |
|---|---|---|
| Late payment | 6+ months | Pay on time going forward |
| High utilization | 1-2 months | Pay down balances |
| Hard inquiries | 3-6 months | Stop applying (time heals) |
| Derogatory mark | 6-7 years | Build positive history |
Most damaging to least damaging:
- Late payment right now: Very damaging
- Late payment from 6 months ago: Moderately damaging
- Late payment from 3 years ago: Minimally damaging
- Late payment from 6+ years ago: Almost no effect
The key is: What are you doing NOW? If you’re making perfect payments today, your score will recover and improve.
As someone building credit from zero:
Won’t hurt (and isn’t the problem):
- ❌ Checking your own score (won’t start your history)
- ❌ Using debit cards (won’t build your history)
- ❌ Having no credit (won’t hurt, but won’t help)
WILL help you build credit:
- ✅ Get a credit card (regular or secured)
- ✅ Use it for small purchases monthly
- ✅ Pay it off in full
- ✅ Let history build over 12+ months
- ✅ Eventually add other account types
You’re not avoiding damage—you’re building from zero. This takes 6-12 months to show improvement.
For newcomers to Ontario: Credit history from your home country often doesn’t transfer. You’re starting fresh in Canada’s credit system. It takes time.
Short answer: No, don’t worry. JAAG works with all credit profiles.
Here’s the truth:
- Your credit score matters for traditional mortgages (they require 680+)
- Your credit score matters less for rent-to-own qualification
- JAAG works with people who have bad credit, no credit, or poor credit
- We assess your overall financial responsibility, not just one number
During rent-to-own:
- You IMPROVE your credit while living in the home
- Your monthly rent payments are reported to bureaus
- We coach you toward mortgage-readiness
- You build credit and equity simultaneously
Stop worrying about your current score. Focus on consistent payments going forward.
The Myth-Busting Summary: What Matters, What Doesn’t
Quick Reference Table
| What You Worried About | Will It Hurt Your Score? | Why/Why Not |
|---|---|---|
| Checking your own score | ❌ No | Soft inquiry (private) |
| Using debit cards | ❌ No | No credit involved |
| Income changes | ❌ No | Credit score measures debt management, not earnings |
| Getting married/divorced | ❌ No | Credit reports are individual |
| Being denied for credit | ❌ No | Denial itself doesn’t hurt (inquiry does) |
| Employer credit check | ❌ No | Soft inquiry |
| Interest rate changes | ❌ No | External factors don’t directly affect scores |
| Paying off old debt | ✅ Slightly helps | Shows responsibility, but account stays on report |
| Paying bills late | ✅ Yes | -50 to -150 points per late payment |
| Maxing out credit | ✅ Yes | High utilization (-50 to -100 points) |
| Multiple hard inquiries | ✅ Yes | -5 to -10 points per inquiry |
| Missed payments | ✅ Yes | Most damaging factor (35% of score) |
Your Action Plan: Stop Worrying About the Wrong Things
This week:
- Stop worrying about the 8 things above (they don’t matter)
- Focus on the 5 things that DO matter (payment, utilization, history, mix, inquiries)
- Check your actual credit report (free, doesn’t hurt, very reassuring)
- Identify your ONE real credit concern (late payments? High utilization?)
This month:
- If you have a real concern, create a specific plan to address it
- Set up automatic payments to ensure on-time payments
- If utilization is high, create a payoff strategy
- If you’re building credit, start with a credit card
This quarter:
- Track improvement (check score quarterly, not obsessively)
- Notice what changes (from your actual actions, not worries)
- Decide: improve credit yourself or explore rent-to-own option?
Ready to Stop Worrying and Start Building?
Myths about credit scores are stressful and distracting. Now that you know what actually matters, you can focus your energy on real credit improvement—not imaginary problems.
And if you’re working toward homeownership in Ontario, remember: you don’t have to achieve a perfect credit score before buying. Rent-to-own lets you start immediately and build credit while living in your home.
- View Our Complete Credit Improvement FAQ — All your questions answered in our main FAQ
- Check Your Rent-to-Own Qualification — Free 3-minute assessment in Ontario
- Schedule a Credit Strategy Session — Discuss your specific situation with our team
