About four in five Americans (77%) fail to realize that accounts with high outstanding balances hurt their credit score even if they pay the bills on time, according to a new Bankrate.com report.

76% are unaware that closing accounts lowers their credit score. 70% would be surprised to learn that limiting themselves to just one credit account has a negative impact. And more than half of millennials don't know that having a short credit history can potentially delay major life milestones such as buying a home.

Perhaps the most expensive misconception is that consumers must carry a credit card balance in order to improve their credit score. This is not true, but that's news to 55% of Americans. The average credit card interest rate is 15%, so someone who is carrying a balance under the false impression that it will help their credit score could easily be throwing away hundreds or even thousands of dollars per year.

If someone makes a credit card payment more than 30 days late, 37% of U.S. adults were unable to correctly state that it will show up as a negative account on their credit report even if the bill is later paid in full.

"There's a lot of confusion about credit scores," said Jeanine Skowronski, Bankrate.com's credit card analyst. "Three simple rules to follow are: pay your bills on time, keep your balances low and build a diverse portfolio of long-term credit accounts."