By Joe Yerardi | NerdWallet

Maintaining solid credit can open doors to financial goals, but misunderstanding how credit works can make your efforts futile.

As part of the 2024 State of Consumer Credit study, a NerdWallet survey conducted online by The Harris Poll asked more than 2,000 adults a series of questions focusing on common misconceptions about credit.

Two thirds (67%) of Americans believed at least one of the five credit misconceptions we asked about. Here, we’re busting them.

1. Leaving a small balance on your credit card is not better for your credit scores than paying it off completely

Roughly a third (32%) of Americans wrongly believe that leaving a small balance on their credit card is better for their credit scores than paying it off completely each month, including about half (49%) of those who carry a balance on at least one card from month to month. But it’s not true.

The best way to build your credit scores is by paying off your card balances on time and in full each month.

This is true for a couple of reasons.

First, payment history has the biggest influence on credit scores. Lenders want to see that you consistently pay back money you’ve borrowed. So you want to make sure you never miss a payment.

Second, credit utilization — the portion of available credit you use — is the next biggest factor in determining your credit scores. Aim to keep your credit utilization below 30%. By paying your credit card bill in full, you’ll prevent your credit utilization from creeping up and dragging down your credit scores.

Avoiding leaving a balance on your card will also mean you won’t be paying interest on that balance. So you’ll be doing your bank account a favor, too.

2. Checking your credit scores does not cause them to go down

About a quarter (24%) of Americans wrongly believe that checking their credit score can cause it to go down.

Checking your credit scores won’t impact them.

It’s actually a good idea to regularly check your credit scores. Knowing where your scores stand will help you understand the sorts of credit you’d likely qualify for. Regularly checking your scores can also alert you to sudden drops that may be the result of errors on your credit reports or even identity theft. Regularly checking your credit reports is a good idea too; this is known as a “soft inquiry,” and similarly won’t impact your score.

Now while checking your own credit won’t cause it to go down, some types of credit inquiries can impact your scores, which leads us to …

3. Your credit scores can go down when a lender runs a ‘credit check’

Nearly 1 in 5 (18%) of Americans wrongly believe your credit scores cannot go down when a lender runs a “credit check.”

In reality, there are many reasons your score might drop, and one of them is a lender running a “hard inquiry” on your credit to determine approval for a loan or credit card, something it can do only with your consent.

The good news is your scores are likely to drop by only a few points and the drop should last less than a year, though the inquiry does stay on your credit reports for two years.

Because these sorts of credit checks will temporarily bring your credit scores down, it’s usually a good idea to space out applications for credit cards by about six months.

The situation is a bit different if you’re shopping for loans. Scoring companies such as FICO and VantageScore will group applications for loans together if made within a short period of time, with the exact time span varying by score model. So it’s a good idea to do your rate shopping quickly if applying for a mortgage or auto loan.

4. People with bad credit can be approved for credit cards

One in five (20%) Americans wrongly believe you can’t be approved for credit cards if you have bad credit.

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The truth is many lenders offer cards tailored for people with bad credit scores (generally considered a score below 630 on the 300-850 scale).

People who want to work on their credit can consider applying for one of these cards when they’re prepared to demonstrate responsible credit use, including on-time payments and paying off the balance in full each period.

These cards often come in the form of secured credit cards. Such cards require a security deposit upfront that’ll be returned to you when you close or upgrade the card.

Some retailers offer store-branded cards that are easier to qualify for than other credit cards. A downside of many of these cards is that they can be used only at that particular retailer. However, some retailers do issue store-branded cards that can be used anywhere traditional credit cards are accepted.

Some lenders offer unsecured cards to people with bad credit. These don’t require a deposit but often have high fees and interest that can end up costing you more than the security deposit on a secured card. For credit building, secured cards are generally a safer choice.

5. Using buy now, pay later isn’t likely to help your credit scores

Nearly a third (31%) of Americans wrongly believe that using buy now, pay later (BNPL) services can better your credit score.

BNPL services are a type of loan that lets you split payment for purchases into multiple equal installments. The most popular BNPL services tend to break the payment up into four installments, with a payment due every two weeks. Unlike other installment loans like mortgages or auto loans, BNPL loans with these shorter repayment periods usually don’t charge interest (though those with longer repayment periods often will). BNPL plans do charge fees for late or missed payments.

Buy now, pay later payment plans usually don’t report to credit bureaus. However, the BNPL industry is still evolving. In most cases, paying back the loans on time won’t help your credit score. Some shoppers might be better off using credit cards, which do report payment history. Be sure to pay off the card’s balance in full each month to avoid late fees and interest.

The complete survey methodology is available in the 2024 State of Consumer Credit Report, published at NerdWallet.

Joe Yerardi writes for NerdWallet. Email: jyerardi@nerdwallet.com.

The article Busting 5 Common Credit Misconceptions originally appeared on NerdWallet.

The Minnesota Timberwolves did some extra digging into Terrence Shannon Jr. before the NBA draft.

They found plenty of sources vouching for his character, bolstering their confidence in a dynamic player whose final season at Illinois was overshadowed by a rape charge he was recently exonerated of.

“The off-court reputation is sterling. Talk to the coaches at Texas Tech. Talk to the coaches at Illinois. They don’t say good things. They say amazing things,” Timberwolves president of basketball operations Tim Connelly said Wednesday night after taking Shannon with the 27th overall pick in the first round. “Obviously he was on the wrong end of a really unfortunate situation, and his ability to play through that and play winning basketball for a great coach in Brad Underwood — we just think he brings toughness.”

Shannon was found not guilty two weeks ago after a jury in Douglas County, Kansas, spent less than two hours deliberating the verdict. He was accused of sexual assault last September during a visit to Kansas for a football game between the Illini and the Jayhawks.

Connelly said the Timberwolves “did a ton” of background work on Shannon with an interest in his experience, fortitude and scoring ability from anywhere on the court.

“Oftentimes, the minute you’re accused you’re found guilty. Thankfully he went the legal process. He chose to go to trial because he knew he did nothing wrong,” Connelly said. “I just think it’s a shame he went through that, and I think it’s a testament to who he is as a kid and his ability to play through a really tough distraction.”

The 6-foot-6 Shannon, who turns 24 next month, can play both guard positions. He started his college career at Texas Tech before transferring to Illinois, leading the Illini to the Elite Elight in the NCAA Tournament before a loss to eventual national champion Connecticut. Shannon was voted first-team All-Big Ten and a third-team All-American by The Associated Press and was the Big Ten Tournament MVP for his performance in March at Target Center in Minneapolis, where he’ll now have his home games as a pro.

“I think he’s a three-position defender. I think he’s an unbelievably competitive guy. He’s got size. Another downhill guy who’s going to play with pace,” Connelly said.

The Timberwolves were elated to get Shannon as a complement to Kentucky guard Rob Dillingham, whom they jumped in to trade for at No. 8 overall through a trade with San Antonio. The Western Conference runners-up could not have had a more productive draft night, considering they’re in no position to enhance the roster through trades or free agency with their salary-cap situation and desire to keep the core of the team together.

“You don’t take those two guys thinking how they’re going to match up together, but our challenge was to try to play a little bit faster in our second unit,” Connelly said, “and I think we got two of the fastest and most athletic and aggressive guys in the draft.”

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The Timberwolves traded back 16 spots on the second-round draft board Thursday afternoon, the cost of doing business to move off the third year of Wendell Moore Jr.’s rookie contract.

Minnesota will now select 53rd overall with its third pick in the NBA draft.

Moore Jr. was a late first-round selection by the Wolves in 2022. He appeared in 54 NBA games but amassed just 228 total minutes. The 22-year-old was never a legitimate threat to crack the Wolves’ rotation.

Moore is due $2.5 million in the upcoming season, a club option Minnesota exercised last fall. That deal eats up a minimum contract by roughly a half million dollars, which can amount to a sizeable savings when you’re in the luxury tax as the Wolves are.

The Wolves could be criticized for picking up that option on the former first-round pick that they ultimately had to essentially pay to dump. But it’s difficult to blame the organization — which needs young talent on cheap contracts given its high-money players at the top of the roster — for not wanting to punt on a young player so quickly.

But now the time to cut ties was especially clear. The first-round draft additions on Wednesday of Rob Dillingham and Terrence Shannon Jr. only moved Moore further down the pecking order. Moore Jr.’s 2025-26 option is for $4.5 million, a number Minnesota would not consider picking up.

So, the opportunity to save some money and move on for a reasonably small cost made sense.

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Next NBA season starts now

A series of pencil marks fills part of a kitchen wall at the Dodig family home. It’s where Jay and Tracie have long tracked the growth of their sons Jimmy and Matty.

As the tallest member of the family, standing 6 feet, 6 inches, Jay once upon a time etched the words “SOME DAY” alongside his pencil mark. He figured it was only a matter of time before Jimmy and Matty eventually caught up to him. He wanted to prepare himself for that moment.

It looks like “SOME DAY” is coming sooner rather than later, especially with Jimmy now standing 6 feet, 5 inches.

“It’s definitely getting close,” Jay said. “He comes up from his bedroom in the morning and I’m like, ‘Who is this kid?’ He’s a horse. I look at him and I’m like, ‘Oh my gosh. Where did Little Jimmy go?’ ”

His massive frame is among the many reasons Jimmy, a shutdown defenseman for the Cretin Derham Hall boys hockey team, has a chance to hear his name called this weekend at the 2024 NHL Draft in Las Vegas. He currently is ranked No. 95 among North American prospects by NHL Central Scouting. Though the rankings don’t guarantee anything, it’s a good bet that a team will take a chance on an 18-year-old with limitless potential.

“Just going to enjoy every moment of it,” Jimmy said. “Hopefully my name gets called.”

This moment has been more than a decade in the making for Jimmy. He fell in love with hockey while learning to skate on a portion of the frozen ice over Minnehaha Creek near where he grew up. He has used that particular sheet of ice to work on his craft as he has grown into his body, developing the skill set needed to succeed as he developed and fine-tuned his hockey skills.

“He was never the kid that just showed up and dominated,” Jay said. “He was the kid that had to grind to make most of the teams he’s been on. He works extremely hard, and I think that’s what sets him apart from some of his peers. He’s got a different mindset than the average person.”

Maybe it shouldn’t come as a surprise then that Jimmy only recently let himself think about the possibility having a future in the professional hockey. It wasn’t until he slowly started to establish himself as a key player at Cretin Derham Hall that he thought that might be an option for him.

“I started to realize that I could hang with the big boys,” Jimmy said. “That gave me a lot of confidence.”

He earned a spot on the Raiders’ varsity squad as sophomore, and recorded 16 points (4 goals, 12 assists), then was named a team captain as a junior, and recorded 23 points (6 goals, 17 assists). He still has another year left at Cretin Derham Hall, so he’s in position to be the straw that stirs the drink for the team as a senior.

“He’s a little bit of a throwback because he loves playing defense,” Raiders boys hockey coach Matt Funk said. “We’re in a day and age of offensive defenseman, and while he can definitely do that and he will show more of that, he’s a defensive defenseman that we can trust to go up against anybody’s top line.”

No doubt his size makes everything a little easier for him when he’s on the ice.

“It’s definitely helped with my reach and my poke check,” Jimmy said. “Just my ability to shut guys down with my stick.”

The whole family will be in attendance this weekend at the 2024 NHL Draft in Las Vegas. As he thought about what that moment was going to be like to watch his son walk across the stage, Jay paused for a few seconds, then unleashed the perfect response, saying, “He will always be my Little Jimmy.”

Indeed. Even if recent (and future) pencil marks suggest otherwise.

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