True or False? Carrying a Credit Card Balance is Good for Your Credit
Raise your hand if you’ve ever heard that keeping a balance on your credit card is good for your credit score. This is one of those pieces of financial “wisdom” that definitely feels true. Of course credit card companies want you to carry a balance, that means you’re paying interest and they’re making more money! So of course they raise your credit score if you do it, right?
Nope.
The credit bureaus don’t publish the formulas they use to calculate credit scores but we do know the basics and carrying a balance just doesn’t help. The best way to improve your credit score, or keep it high, is to use credit responsibly. That means paying on time, and in full, every time. It’s true for car loan, your student loans, and your credit cards. In fact, carrying a balance costs you money in interest payments and ultimately probably lowers your score. Want to know why? Read the full article here.