Carrying small balance on credit card improves FICO ... really?
There is a rather persistent notion that carrying a small balance on credit card or two helps increase FICO score. The rumor goes along these lines,
- carrying something like $20 on credit card with $1,000 credit limit gives you 2% utilization ratio which is great
- credit cards with small balances are reported to credit agencies somehow more frequently than credit cards with $0 balances
- both of the above quickly improve FICO scores
I would not put it into credit report myths category, more of an urban folklore. Carrying a small balance on your credit cards will not improve FICO fast. Likely will not improve at all. All you need to do is to pay the credit cards in full every month.
Thu Dec 16, 2010 11:12AM | Copyright: www.bad-credit-advisor.com | More in Credit Score Help | Comments (0)
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