How to Increase Your Credit Score and Build Your Credit

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Does leaving a balance of $1 help you? No, it’s a myth. Pay your balance in full and on time.

GREENSBORO, NC – Your credit score is everything. This can be a factor in getting an apartment, getting a job, getting a loan for a car, and the interest rate you’ll be charged.

The problem is that there are many myths about how to increase your score. 2 Wants to know the facts, so let’s get it straight.

Recently, someone told me this:
To build credit and increase your score, you need to pay off the majority of your balance, but keep $1 month-to-month.

Is it a myth or a fact?

“It’s a fairly widespread myth. Your credit card balance is what you owe. Owing nothing is better than owing something, even if it’s only a dollar,” said Nathan Grants of Moneytips.com.

Don’t leave a small balance thinking you’re doing yourself a favor. What matters is how much credit you have and how close you are to the end. This is called credit utilization.

This is standard, regardless of the amount of credit you have, it could be a threshold of $500 available credit or $10,0000. The rule of thumb is that you don’t want to use more than 30% of the total available credit. It shows that you are not at the maximum.

In a perfect world, you would have all your credit to use because you pay your bill in full and on time each month.

“These payments, on time, in full if possible, are the things that get flagged up that will do your credit score good. A single late payment can stay on your credit report for up to seven years, so the last thing you want to have is a late payment,” Grant said.

To build your credit and increase your score, pay your bill on time, every time. If you can pay it in full. Paying the minimum balance on time shows you’re consistent, but it doesn’t help your credit usage and gives the credit card company money.

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