Reply #41: That's Not True! [View All]

I am on the board of directors of a small bank. That's is one of the great myths of finance. As long as you HAVE a credit card and you use it, the credit score is based upon the recycle time of payment. So, as long as that is short, the credit score goes up.

Also, since overall borrowing leverage is based upon total household income vs. total debt, the lower the average balance the higher the score, and that's the single most important factor in the scoring.

Now, if one is quite young, one's credit score is almost zero (nobody with an income has a zero). So, if you've never borrowed anything in your own name, there is no credit history. Using the credit card, and carrying a small balance, then paying it down WILL raise the score.

But, after a few years, not carrying a balance has no negative effect on the final score.

If you're interested, PM me. I can get the scoring formula for you and send it to you.

But, trust me on this. NOT CARRYING A CC BALANCE DOES NOT NEGATIVELY INFLUENCE CREDIT SCORES! This is a myth! Started by whom: THE CREDIT CARD COMPANIES! Things that make you go "Hmmmmm!"
The Professor