If I use my credit card and pay the balance in full each month, how will this impact my credit score?
Paying your balance in full each month is the best way to manage your credit. Now, here is the other side of the equation:
Credit scores add up the limits and the balances on your revolving accounts in order to calculate your overall balance-to-limit ratio, or utilization rate. The higher your utilization rate, the greater the negative impact on your scores. To recap, paying the balance in full is good. Having cards with no activity and/or a balance near the credit limit (even if paying in full each month) may lower your credit score.
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It's not what you make; it's what you keep that determines your lifestyle.
| 05.31.16 @ 02:33
Considering that 35% of your FICO score is driven by payment history, paying on-time in full always has a positive impact to your FICO score. The only negative impact is how much of your limit that you charge on a monthly basis as 30% of your FICO score is based on the reported amounts owed, regardless of whether you pay it off every month. You should keep charged balances no greater than 30% of your limit to maximize the positive impact to your FICO score. | 05.31.16 @ 14:19