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Do I need to leave some balance in my credit card

shall I pay it off so that it improves my Credit Score?

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The factors that help in calculating your credit score are: payment history, amounts owed, length of credit history, new credit, type of credit used.

Amounts owed is a factor which makes a person believe that you need to maintain a balance in your account to increase your score but that is not the scenario. In fact, this can be detrimental for your score. This is because of something called debt utilization ratio. This is the ratio of the amount of debt you owe and the amount of debt you have available. Holding a balance in your credit card account does nothing to enhance this ratio or anything in your credit score. So how will a credit card improve your score? Using a credit card allows you to build a credit history. Therefore if you possess a credit card, then use it and pay it off every month (never, ever pay late) before the billing cycle is up. In this way you can build credit history without paying any money for interest and you’ll appear to be a responsible, savvy person who is reliable enough to be given a bigger loan in future..


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