Does Paying Credit Card Balance in Full Each Month Hurt Scores?

By Jennifer White

2 min readNov 21, 2018

Dear Experian,

If a consumer pays off the card balance monthly, does it still have value in the payment history?

- MCL

Dear MCL,

You do not need to carry a credit card balance from one month to another in order to get credit for your good payment history. Ideally, you should pay the balance in full each month to avoid paying interest and accumulating debt.

The credit card balance that shows on your credit report is typically the balance reflected on your billing statement. So, even though you pay the balance in full each month, your credit report may not reflect a $0 balance.

When looking at your credit card history, lenders want to see that you are using the account and that your payments are being made on time every month. Carrying a balance will not improve your credit scores. In fact, it could hurt them. Credit utilization is the second most important factor in credit scoring. The lower your utilization rate, also called balance-to-limit ratio or utilization ratio, the better.

Credit Card History Plays a Big Role in Credit Scores

Credit cards are a key part of your credit history because you decide how much you will charge each month and how much you will repay. Since you are in control of those spending decisions, credit cards tend to tell lenders a lot about your financial situation and your credit management skills.

While you don't absolutely need a credit card to have good credit, having at least one or two credit cards with low balances and positive payment histories can be beneficial for your credit scores.

Thanks for asking,
Jennifer White, Consumer Education Specialist

This question came from a recent Periscope session we hosted.