Asked by Alec  |  Submitted August 23, 2015

If I'm in my mid 20s and have a credit card with a credit limit of $2,000, how much balance should I keep on it to build up credit?

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  Answers  |  2

August 24, 2015

Monthly payments will build credit regardless of the account balance. If you carry a balance over 10% to 20% of the limit, your credit score will not be as high as it could be. To build credit without getting into trouble or paying high interest rates, use the account once per month and pay it off when you get the bill. I setup autopay on my utility bills to my credit card that pays me cash-back and then pay the credit card off each month. I am building credit, not paying interest and getting 3% cash back!
You should try to have at least 3 accounts that you pay monthly. A fuel card, a store card and a VISA/MC works well.

$commenter.renderDisplayableName() | 01.18.17 @ 10:09

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June 14, 2016

Hi Alec. Maintaining a balance is not a pre-requisite to building your credit or improving your FICO score. Utilization is key and that simply means that you do not use more than 30% of the limit while paying it off in full every month. Good luck on building excellent credit.

$commenter.renderDisplayableName() | 01.18.17 @ 10:09

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