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I pay my credit card off every month, in full, but was using nearly the max limit. I thought that it was good to use nearly the max and then pay it off, showing that I was using my card and able to fully pay it off. After some research, I see that that is probably doing worse to my score than if I barely use the card at all. I have not been able to find a definite answer to this question and was wondering if anyone has any first hand experience or knowledge of how this affects credit scores. If it is better to use some of the credit, and then pay that off in full, what is the general percentage that I should use to get a better credit score?

10 Thoughts on Is it better, for your credit score, to not use a credit card or have a small balance?
  1. Reply
    Sam Bradley
    November 6, 2011 at 6:49 am

    Its better to have a small balance.

  2. Reply
    Fahr Quad
    November 6, 2011 at 7:39 am

    Your credit score is based on the amount of available credit as opposed to outstanding balance, so having a zero balance is best.

  3. Reply
    It's me
    November 6, 2011 at 7:50 am

    Small balance and pay it off within the bill cycle. It show responsibility. If you just have a creditcard they still don’t know how you handle bills.

  4. Reply
    November 6, 2011 at 8:19 am

    I have never had a credit card at all, I bought a brand new car a couple of years ago and I actually had great credit…but I would say using it for things like gas and groceries and paying it off right away is the best way to go.

  5. Reply
    cat lover
    November 6, 2011 at 8:48 am

    You have some things correct, and others wrong. You pay off your credit card each month, which shows you can handle credit. But you run the credit card to the max, so those monitoring will look to see the risk that you will not pay it off the next month, which will be adverse to your credit score.

    The credit score not only looks at how you use credit, but what amount of the available credit you use.

    As you use more and more of your available credit, it puts you at higher risk based on those who crunch the numbers.

    Credit scoring will examine how much of your available credit you’re using and penalize you if the percentage is too high.

    The ideal? “As close to zero as you can get,” Watts says.

    The limit credit bureaus want to see? Anywhere from 25 percent to 35 percent depending on the formula (and who you ask).

    “A balance above 50 percent really begins to hurt you,” says Steven Katz, director of corporate communications for TransUnion.

  6. Reply
    November 6, 2011 at 9:32 am

    depends on what end results you want. I keep mine at max, not concerned over the score since I don’t intend to buy a house, simply because no one can get in and steal my money because the bank would reject them. Banks want you to keep your credit cards high so that they can earn money off of you (charge you interest). On the other hand it’s said that if you want to buy a home or even get additional credit then you need to keep your credit cards open and pay half off of what the account allows you to use. If you have American Express though you will have to pay it off in full every month. Credit scores became important before 2008 when people were out there trying to buy expensive homes. But now those homes cost half of what they did, the dollar is worth less these days and lots of homes have been repossessed, the interest is low on buying homes now but very few people are buying because insurance, taxes, etc. are expected to rise by a whole lot. So why do you want a better credit score?

  7. Reply
    November 6, 2011 at 9:37 am

    you have to have a small balance in order to build credit. Having no credit gets you nowhere like having bad credit does because if you have no credit you still cannot get a house or car. So yeah just build your credit slowly but surely maybe even buy just one think a month with your credit card and pay it back consistently.

  8. Reply
    November 6, 2011 at 9:42 am

    Just keep using your card and paying the balance in full every month. As long as you pay at least the minimum payment by the due date, the card will report you as on time and this builds your credit. Paying the balance in full just keeps you from paying interest.

    There are many people who will make a big deal out of only using 10% or 20% or 30% (depending on what “credit expert” site they frequent), but as long as you pay the balance in full, it REALLY does not make a big difference to your score if you max out the card. In fact, after about 9 months or so, the card will probably increase your limit.

    it’s carrying balances of more than 30% of your limit that can hurt your score, but even then, pay off the balance and your score rebounds.

    By the way, not using the card at all will do nothing for your credit. You have to actually use the cards on a regular basis to generate utilization and payment history.

  9. Reply
    November 6, 2011 at 9:57 am

    I have an answer for you:

    Use 10% of your credit limit in a billing cycle and pay that off in full when you get the bill or at least stop making any further charges until that amount is paid off in full again. So if you have a $ 1000 credit limit you only use $ 100 of it and pay that off in full before you charge the next $ 100.
    You are supposed to use the card on a regular basis but at the same time you need to show them that you don’t need to use up the whole line of credit and that you have the discipline to use the card wisely.

    Never max out a card even if you pay it off in full eventually. The credit bureaus measure how much available credit you have. The more the better… so if you use it all up every month you look like you are living on the edge and above your means.

    A well to do person does not need to use their credit much and will have a huge amount of available credit and very little monthly use of it.

  10. Reply
    November 6, 2011 at 10:57 am

    Use exactly $ 1. A lower percentage is always better than a higher percentage. The best percentage to have in use is 0% Using $ 1 is enough so that you will be paying something, but not so much that your percentage gets high.

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