Credit Question.

[rkmemkc]

I have read so many different opinions on Credit that I thought I would throw it to you.
In your humble opinion is it better for your credit score to utilize 1/2 of your available balance and take your time to pay it off or just pay it off each month?
:fish:

[dnickels]

Carrying a balance to improve your credit score is a terrible way to do so. Most of your credit score is determined by payment history, amount owed and utilization ratio. Any few added points that you might gain by carrying a balance each month is far outweighed by the extra money you'll be paying in interest from holding that balance.

You can google 'does carrying a balance help your credit score' if you don't believe me but carrying a balance with the goal of improving your credit score is not a good idea.

[rkmemkc]

I totally agree and that makes the most sense! Thank you for your answer!! :mickey:

[1DisneyNut]

I agree with dnickels. It is actually best to only utilize a small percentage of your available credit, about 25% or less. Carrying a balance does little if anything to improve your score. That is probably a myth perpetuated by the large banks just to get you to carry a balance so they can make money.

In my opinion, it is best to pay the balance each month. If you do need to float it out for whatever reason, pay it off as soon as possible. Within 3 to 6 months. If you find yourself constantly carrying a balance and never making any headway or even worse, a growing balance; you are headed toward trouble or at least throwing money away in interest. If in that position, it is time to cut back on spending and focus on paying your balance off.