Now that you have finally paid off your credit cards, you decide that you're through with those accounts you've had for years. You only missed a few payments on your newer ones, so it should be long forgotten by now. Besides, you just paid off all your debt, and now you should have about fifty extra points on your credit score.

So you close out your old accounts, and you go to check your credit report. To your absolute horror, you find out that your credit score has not only gained less than the fifty points you expected, but the score has actually dropped! What did you do wrong?

You got fooled by the top three myths of paying off your credit cards. So what do you believe and what do you ignore? What are the myths and how can you get the truth?

1. Myth: It's Better For Your Credit Score to Close Old Accounts and Keep the New Ones.

Fact: This is the biggest misconception of all. Most people do not understand that having old accounts, whether they are active or not, is part of what is keeping your credit score as high as it is. Paying off those credit card accounts is good, but closing those accounts after paying them off can hurt you by actually lowering your score. Having an old account can be beneficial particularly when you have made most or all of your payments on time because it shows that you are dependable with your credit cards and can maintain your debt well over a long period of time.

Closing your old accounts actually changes the debt-to-available-credit ratio, making your credit history look shorter. This makes it appear like you have less experience with credit and therefore are less likely to be disciplined in your spending and punctual with your payments. If anything, it's better to close your newer accounts instead of your old ones.

2. Myth: You Add 50 Points to Your Credit Score by Paying Off Your Debt.

Fact: So your first belief was that you were going to get an extra whopping fifty points. Well, it is true that your credit score will improve, but you can never be sure by how much. Everybody should be rewarded for their ability to get out of debt, but how many points you get depends on a rather complicated equation that takes into consideration a lot of different features.

Myth: Paying Off Your Credit Cards Erases Negative Reports.

Fact: Sometime during your history of having a credit card and making payments on it, perhaps you made a few mistakes, like forgetting to pay your bills on time. Everyone has done it at one point or another, but what some don't realize is that it can stay on your credit report for seven to ten years! So if you pay off your credit card bills, even if you pay them off early, those mistakes you make will only be erased with time -it's best not to make the mistakes in the first place!