10 Credit Card Truths Hidden from the Majority of Americans

You Must Carry a Balance To Improve Your Credit Score

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A prevalent misconception regarding credit cards revolves around the belief that you must maintain a balance to enhance your credit score. This misunderstanding likely stems from the fact that credit card usage is necessary to generate positive score reporting. In reality, the most significant component of your FICO credit score is your payment history, constituting a substantial 35% of your overall score. However, it’s crucial to emphasize that using your credit cards and promptly paying them off is what benefits your score, without the need to maintain an outstanding balance. In fact, the amount of debt you owe is another significant factor in your credit score, so carrying a balance will actually detract from your score rather than improve it.

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