Do You Have to Carry a Balance and Pay Interest to Build Credit?

It’s a common belief:

A way to improve your credit is to carry a small balance from month to month.

Creditors like to see that people take out loans and pay interest on them, so they give people who pay interest a better score.

If you think about it that way, it makes a lot of sense.

Luckily, this isn’t true.

You don’t have to carry a balance from month to month to build your credit score.

In fact, carrying a balance can hurt your score if the balance is too large. In effect, you’ll be paying interest for no benefit at all.

Learn how credit reporting and scoring really works to the common myth that carrying a balance is good for your score.

Read more at My Bank Tracker.