Does it matter how much you pay off on a credit card each month?

Question

***When trying to build great credit doe sit matter how much you pay off each month or just if it's on time? For example, say I have a $10,000 Credit Card and I'm looking to improve my credit score. Obviously the KEY is making payments on time. The question is...WILL IT IMPROVE MY SCORE MORE IF IT WAS A LARGER BALANCE BEING PAID OFF EACH MONTH?

I ask because if my credit score will improve a lot more because of paying more on the card, I am thinking about paying rent with it. 700 bucks a month being paid off in full compared to gas at 50 bucks a month.

DOES THIS MAKE SENSE???

HELP!

I'm not talking about keeping a balance on it.

Suppose I had a choice to put 50 bucks on a CC each month and pay it off in full each month. No doubt it will help my credit score. Suppose I could just as easily charge $1000 a month and pay it off in full each month.

Which path will improve my credit score better?

Answer 1

FICO credit scores are based on:
Payment history - 35%
Amounts owed - 30%
Length of credit history - 15%
New credit - 10%
Types of credit used - 10%

So HOW you pay is more important than HOW MUCH you pay. The credit agencies are also consider with you *debt-to-credit* ratio - let's say you have a total of $20,000 credit available to you for loans and credit cards (even if you're only using a small portion of it, that's how much you might be eligible for based on your current credit score, in this example). If you consistently but responsibly borrow and pay back $19,999 of that every month, your creditors think you are cutting it very close and are therefore a risk; but if you only borrow and pay back $1000 of that whole pie, then creditors know you're not a big risk-taker.
That's my analysis, anyway.

Answer 2

Are you talking about how much you charge or how much you pay each month? Since credit cards charge very high interest, its always best to pay as much of your bill as you can. Anything you don't pay is a very high interest loan that you are taking from the credit card company. In my opinion, its much more important to avoid high interest charges than it is to keep a balance in the hopes it will increase some score in a computer somewhere.

Answer 3

Paying all of your bills on time is paramount in establishing a good credit score. How much you pay is insiginificant as long as you pay the minimum payment amount but do try to pay off the balance on credit cards to avoid finance charges.

Here are some additional guidleines to establish good credit:

http://www.bankrate.com/brm/news/credit-management/establishing-credit.asp

Answer 4

I'm no expert but they look at both "outstanding debt" and "available credit" so I would think yes, it does matter how much you pay off in the sense that it affects those 2 numbers.

Now careful because I've heard that carrying too much available credit can be bad.

Check amazon or your local bookstore there are plenty of books on this topic.