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10 Myths About Your Credit Report - Part 2: It’s Better to Pay My Balance In Full Than To Carry A Small Balance Each Month

It is financially wiser to pay your balance in full each month, but it’s bad for your credit score to do so. Potential creditors look for someone who pays more than the monthly minimum payment every month on a timely basis. Remember, creditors don’t like it when people pay their balances in full each month because then the creditor makes no money from that customer.

It’s a better idea to keep one credit card open, charge $100 on it, and pay $50 each month. Over time this will prove to prospective lenders that you incur debt, pay it responsibly, and can be counted on to do so in the future.

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