I normally pay off the balance on my card every month, but I recently took a somewhat extravagant trip and have not paid the entire thing off and have run a balance the last two months. I was worried that it would affect my credit score negatively, but it's had the opposite effect. Why?
Finance Gays: Why does your credit score go up when you carry a balance?
| by Anonymous | reply 1 | October 1, 2025 2:07 PM |
You want a small amount (relative to your credit limit) being reported to the credit bureaus each month because it shows you're using your card but keeping your utilization % low. That proves responsible use. Once your statement posts, you then want to pay it off. There are two separate dates each month--the statement posting date, and the payment date, usually separated by 5 days. A few days before the statement posting date, you want to pay down your balance to (ideally) between 1%-4% of your total credit limit. That will always guarantee a tiny credit score boost.
| by Anonymous | reply 1 | October 1, 2025 2:07 PM |