Your credit score is one of the most important financial factors. It is even more important if you’re into credit card churning. You need a good score for credit card companies to approve you for new credit cards. You can find out more here about credit scores, and what to do to improve yours or how to start from scratch. But many people do not check their scores, or follow bad advice or myths that is actually hurting them.
One of those myths is that if you carry a balance on your credit card is a good thing. Many consumers don’t pay their entire credit card bill each month because they think carrying a balance will help their credit score. Based on a creditcard.com survey, 22 percent fell prey to a persistent misconception that carrying a balance helps your credit score.
You should always pay your bill in full. The ratio of the amounts you owe to your overall available credit limit is an important factor. It accounts for 30 percent of your credit score.
Not paying your cards in full doesn’t just hurt your credit score and your ability to borrow, but it also costs you money each month. Credit card debt is a very high interest loan, so it should be the first to pay back.