Fact: The balance of an account has no influence over the speed at which you will build or re-build your credit reports or credit scores. A credit card with a $5,000 balance ages just as quickly as a credit card with a $0 balance. Further, even if you pay your balance in full each month there’s no guarantee that the account will show up on your credit reports with a $0 balance. Credit card issuers report your statement
balance to the credit reporting agencies. That means even if you pay your balance in full any subsequent use of the card is going to result in a statement balance greater than $0.
One of the most effective ways to build or rebuild your credit is by responsibly managing the accounts that you currently have, or open in the future. Maintaining low balances on credit cards and never missing a payment will lead to better credit scores. However, that certainly doesn’t mean you have to live a debt free life in order to have solid credit. In fact, credit scoring models reward you for a track record of positive credit experience.
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