Which builds better credit history?

Question

Which method builds a better credit history? Paying for everything you owe every month? Or paying a consistent amount every month, but not paying for all that you owe? My friend was suggesting that leaving a portion unpaid, will raise your scores, since you have "credit", and this is offset by your consitent monthly payments? Any truth to this?

Answer 1

You should pay the most you can every month. If you only owe like $50.00 on a credit card you should pay off the balance instead of just paying the $10.00 or $15.00 min. payments. They credit bureaus eat that stuff up. They love to see that you have the ability to pay back what you owe. It will jump up your credit score. And in response to a previous answer you can pay more all you want on your bills but your credit report will not read "paid better than agreed."

Answer 2

Your friend is right only if he's talking about credit cards. But, in regards to paying your other bills every month, on time, and in full...that's the way to have a great credit score. If you can't pay a bill in full, calling them and letting them know how much you can pay, and by what date, will make sure that your credit score doesn't suffer. Your creditors (yes, even utilities) will report you to the credit agencies for being late, or not paying your bills in full. Making arrangements with them shows them that you're making an attempt, and they will mark that on your records. The "credit" on your credit score shows how consistent you are with paying your bills on time and in full. That score can even affect how high your car insurance is too, so keeping up with your bills is a very good thing. Also, request a credit report every year, so you can keep track of your credit, as well as any "funny" business that might be going on with your credit. Identity theft is on the rise, so protect yourself. You get on free report a year, upon your request. There's three credit reporting agencies to choose from. Take it from one who's been there, done that. Pay your bills in full and on time. It's best for your financial future. As for credit cards, if you must use them, pay off the balance every month, to avoid the interest charges. Some people pay all their bills with their credit card, then pay the credit card company with one check every month. It simplifies the bookwork and saves postage & checks too. If you just keep and use one credit card, paying it off every month, your credit score will be very high. Also, I have a friend who uses her card just for gas, then paying the bill with one check every month. Whatever way you choose, you'll be keeping your credit history rolling along. But, don't EVER be late, 'cause that will put things in motion that will be very unpleasant, like higher interest rates. Pay your bill at least a week before it's due (maybe more, depending on how far it has to travel). Of course, paying on-line is faster, and has less chance of getting "lost in the mail". <*)))><

Answer 3

This is true.. If you completely pay off your credit cards everymonth you don't build more credit then if you leave a balance.. The longer you have a balance (in good standing) the better your credit will get over time... But always remember your paying those nasty interest fee's as well.. Whatever your minimum amount due is, pay like $20 over that amount and your credit bureau should read "Paying better then agreed" as long as your lender updates the information as often and accurately as they should..

Answer 4

maybe payin a lil more than the min and pay them on time!