We have all heard the rumors...from neighbors, relatives or friends. There are a wide variety of myths floating around about what you should and shouldn't do to manage your credit.

1. Your score will drop if you check your credit! - Fortunately, this one is absolutely not true. Examining your own credit report and score is considered as a "soft inquiry" and doesn’t harm your credit at all. Only "hard inquiries" from a lender or creditor, made when you apply for credit, can bring your credit score down a few points. Concerned about damaging your credit while shopping around for a loan? Multiple inquiries for the same purpose within a short period of time (a few weeks) are put together into a less damaging period of inquiry.

2. Is Closing old accounts a good idea? – To close or not to close, that is the question. Many people believe closing old and inactive accounts as a way of managing their credit. But they should think twice before closing the oldest account on their credit reports. Closing old credit accounts can lower a credit score by making the credit history seem shorter than it really is. If you want to reduce your levels of available credit, ask for your credit limits to be lowered or close newer accounts instead.

3. Once you pay off a negative record, it is removed from your credit report - Negative records such as collection accounts, bankruptcies and late payments will remain on your credit reports for 7-10 years. Paying off the account before the end of the set term doesn't remove it from your credit report, but will cause the account to be marked as "paid." It is still a good idea to pay your debts, just be aware the major change in your report will come when the negative records expire.

4. Being a co-signer doesn't make you responsible for the account - When you open a joint account or co-sign on a loan, you are taking on legal responsibility for the account. Any activity on these shared accounts, good or bad, will show up on both people's credit reports. If you co-sign for a friend's auto loan and they don't make the payments, your credit profile will be hurt by their actions and vice versa. The only way to stop this double reporting is to refinance the loan or to have the creditor officially remove you from the account.

5. Paying off a debt will add 50 points to your credit score - Your credit score is calculated using a complex algorithm that takes into account hundreds of factors and values. It is very hard to predict how many points you can gain by changing one factor. For a person with a high credit score, just one late payment can cause a significant drop. If a person has a low credit score, it may not cause a large drop at all. Just keep paying your bills on time, reducing your debts and removing negative inaccuracies from your credit report. Good financial behavior and time are the two most important factors for your credit score.