Finance Blog

Stay financially savvy with the Equifax Advisor.

Sign up for our FREE Monthly Email Newsletter


Thank you for signing up for the FREE Equifax monthly newsletter

In addition to keeping in the financial know, you may be interested in checking your credit score and report.

Understand your credit. Help protect your identity.

Equifax Complete™ Premier Plan

  • Know What May Influence Your Credit Score and Be Alerted of Changes
    Credit score monitoring with custom alerts
    Important Disclosure: The Equifax credit score and 3-Bureau credit scores are based on an Equifax credit score model and are not the same scores used by 3rd parties to assess your creditworthiness.¹
  • Help Protect Your Identity
    Automatic fraud alerts encourages lenders to take extra steps to verify your identity²
  • Lock Your Credit
    The ability to lock and unlock your Equifax Credit Report³
Save 75% your first 30 days with the purchase of Equifax Complete™ Premier

$4.95 for the first 30 days, then $19.95 per month thereafter. You may cancel at any time; however, we do not provide partial month refunds.4

¹The credit scores provided under the offers described here use the Equifax Credit Score, which is a proprietary credit model developed by Equifax. The Equifax Credit Score and 3-Bureau scores are each based on the Equifax Credit Score model, but calculated using the information in your Equifax, Experian and TransUnion credit files. The Equifax Credit Score is intended for your own educational use. It is also commercially available to third parties along with numerous other credit scores and models in the marketplace. Please keep in mind third parties are likely to use a different score when evaluating your creditworthiness. Also, third parties will take into consideration items other than your credit score or information found in your credit file, such as your income.

²The Automatic Fraud Alert feature is made available to consumers by Equifax Information Services LLC and fulfilled on its behalf by Equifax Consumer Services LLC.

³Equifax Credit Report Control™ is only available while you have a current subscription to Equifax Complete Premier. Locking your credit file with Equifax Credit Report Control will prevent access to your Equifax credit file by certain third parties, such as credit grantors or other companies and agencies. Credit Report Control will not prevent access to your credit file at any other credit reporting agency, and will not prevent access to your Equifax credit file by companies like Equifax Personal Solutions which provide you with access to your credit report or credit score or monitor your credit file; Federal, state and local government agencies; companies reviewing your application for employment; companies that have a current account or relationship with you, and collection agencies acting on behalf of those whom you owe; for fraud detection and prevention purposes; and companies that wish to make pre-approved offers of credit or insurance to you. To opt out of such pre-approved offers, visit www.optoutprescreen.com/.

4We will require you to provide your payment information when you sign up and we will immediately charge your card $4.95. After that, we will charge the card $19.95 for each month you continue your subscription. You may cancel at any time; however, we do not provide partial month refunds.

Equifax® is a registered trademark and Equifax Complete™ Premier is a trademark of Equifax, Inc. © 2014, Equifax Inc., Atlanta, Georgia. All rights reserved.

When NOT to Pay Off Your Credit Card Debt in Full

Written by Beverly Harzog on March 23, 2015 in Credit  |   33 comments

Paying off your credit card balance in full each month is a great way to avoid accruing interest. However, there are three times you may not want to fully pay off your credit card debt and instead use that money elsewhere.

When NOT to Pay Off Your Credit Card Debt in FullPaying off your entire credit card balance by the due date every month is a worthwhile goal. After all, if you don’t pay it off, you’ll end up paying interest on the remaining balance. But believe it or not, there are actually a few circumstances when paying the balance in full might not be your best bet.

Generally speaking, there are three instances where it’s appropriate for you to consider not fully paying off your credit card debt:

1. You have a cash flow problem. If you can barely make ends meet, you might be tempted to dip into your savings to pay off your entire credit card balance. This may only be a good idea if you have an emergency fund that’s substantial enough to cover your expenses for a minimum of three to four months. Depending on your circumstances—if you have an unstable work environment or several children to support, for example—you might need an even bigger cushion.

Before you pay off your credit card using your savings, decide how big of an emergency fund you need to have. Once you identify that amount, you can decide if it makes sense to use the extra money you’ve saved to pay down your balance.

2. You have a credit card with an extremely low APR. It might be a good idea to have a low-interest credit card in your back pocket. There are some emergencies or big expenses that can put a major dent in your rainy day fund, and sometimes you’re better off carrying a balance for a month or two vs. draining your fund and leaving yourself financially vulnerable.

For example, if your car needs $3,500 in repairs, you might decide to put the amount on your 9.99 percent APR credit card for two or three months rather than pull the entire amount out of your savings account at once.

3. You have several major expenses coming up. In addition to your car that needs $3,500 in repairs, what if you also find out that your child needs braces and that your fridge needs to be replaced? If you know that you will have so many expenses in the near future, you might decide to be conservative with your cash and not pay your credit card balance in full this month. Keep in mind that if you don’t have a low-interest credit card, it may be best not to carry the balance for very long if you can help it.

(Read more: Should I Save Money or Pay Off Debt?)

What to do if you think you’re getting into serious debt?

While there are circumstances under which paying off your balance in full might not make sense, if you regularly find yourself unable to pay off your balance, you need to take action.

Paying interest every month is not good for your financial health, and it’s not good for your mental health, either. If you want to get out of credit card debt, consider taking the following three steps:

1. Figure out why you have a balance. It’s very important to get to the root of why you’re in debt. Do you have a problem with impulsive purchases? Do you spend too much dining out or going to the movies? Did you have a financial emergency?

If you don’t get to the bottom of the issue, you might be destined to repeat it. Sometimes, just setting up a budget and tracking your spending can solve the problem. It’s tough to rein in your spending if you don’t know where you spent money or how much you spent.

2. Create a plan to pay off your debt. If you have more than one credit card with a balance, make a list of your cards. Write down the balance amounts and the APRs of each card. Start by first paying off the balance on the card with the highest APR. After that one is paid off, start working on the card with the second-highest APR, and so on.

If possible you should consider transferring the balance with the highest APR to a credit card with a low or even 0 percent APR. Typically this low or 0 percent APR will only last for the introductory period, which can vary between cards, but it will give you time to pay off the debt (or at least pay it down) without paying interest, which could save you quite a bit of money.

3. Build up your emergency fund.
Life is unpredictable, and having a rainy day fund will help you survive the financial emergencies that will pop up occasionally. When you have the security of an ample emergency fund, you don’t have to choose between having cash and paying off your credit cards. When you do have to use your emergency fund, make it a priority to refill the coffers as soon as you can.

There are certainly times when paying off your credit card balance in full might not make sense for you, but you may want to strive to do so as often as possible. By not spending more than you can pay off in a given month, you’ll help keep your finances healthy.

Beverly Harzog is a nationally recognized credit card expert, consumer advocate, and the author of Confessions of a Credit Junkie: Everything You Need to Know to Avoid the Mistakes I Made. She runs a popular credit card blog on her website, www.BeverlyHarzog.com.

The information contained in this blog post is designed to generally educate and inform visitors to the Equifax Finance Blog. The blog posts do not give, and should not be assumed to provide, personalized tax, investment, real estate, legal, retirement, credit, personal financial, or other professional advice. Before making any financial decision, you should always consult with the appropriate professionals who can explain your options, rights, and legal responsibilities, and advise you on any tax, legal, credit, or business implications that may result from those decisions. The views and opinions expressed by the authors of blog posts are their own views and may not be the views or opinions of Equifax, Inc. and/or its affiliates.


  1. J D K says:

    I was told by a mortgage manager of over ten years that paying off your credit cards to zero balance isn’t the best practice for receiving the best credit scores. She told me to leave under ten percent of the credit allowance so if you have a credit card with a $5,000. allowance to leave under $500. unpaid or less depending on what is owed each month. I was paying my balances off to zero, not owing any money each month so I would get each monthly statement showing a zero balance. So I’ve been trying it her way of leaving 5% or less and my credit score has gone from 820s to 810s. So what gives? Which way is best for the best credit scores?

    • Kathy says:

      I think you may have misunderstood your mortgage bankers advice. The key to attaining and maintaining good credit is to pay off your revolving debt entirely (to 0 balance) every month on time. I believe you are confusing your credit card DEBT with your CREDIT LIMIT. They are two different things. If you have a $5000 CREDIT LIMIT (the total amount you can charge to your credit card per month without having to incur fees), the best things to do are: Pay the total you owe for each monthly period of charges you made which means you pay the entire credit card balance each month. Charges to your card should not exceed $4500 per month of the CREDIT LIMIT. The amount you leave (in other words, do not charge to your card) should be well UNDER your CREDIT LIMIT. The amount a person chooses is a personal choice. Your banker’s advice is correct as it was suggested to leave $500 or so uncharged each month on a credit card so your CREDIT LIMIT is not exceeded. This is a big factor in determining credit score. If you are close to maxing out or do max out your CREDIT LIMIT each month your score will be lower. By keeping a specific amount uncharged on your card each month ( in the example you gave, $500 of CREDIT LIMIT left) shows the Credit Bureaus that you are a responsible borrower. But only if you ALSO pay off the entire balance each month will it really make an impact on your score. You stated the banker said “to leave under $500 UNPAID each month depending on what is owed each month”. Your interpretation is incorrect. Any credible banker would not give that advice. I think the banker meant what I have described above: leave $500 in your CREDIT LIMIT. NOT to PAY $500 less on your credit card balance each month. The amount you choose to remain in your CREDIT LIMIT has nothing to do with what is “owed each month”. Once a CREDIT LIMIT is established, the amount you choose to remain of that CREDIT LIMIT should not vary until the actual CREDIT LIMIT itself is reduced or increased. I hope my lengthy, meandering and somewhat repetitive advice is helpful.

      • Nathan S says:

        Kathy, you misunderstood JDK’s situation in your zeal to be informative.

        JDK said he has a $5,000 credit limit, on a card which paid to $0 balance every month. His mortgage banker told him to stop paying the card completely and instead leave a small balance of less than 10% of his credit limit as a balance on the card to carry over each month, as a way to build his credit. He is not saying he pays only $500. He is saying he leaves a remaining balance of only $500 on a $5,000 limit card.

        Make sense?

        I have received the same advice as JDK and I’m a little surprised at his results, too. I would love to hear about the best ways to manipulate credit card balances in order to increase one’s score. I am in the habit of paying off my cards each month, but if leaving a small remaining balance is better, I would certainly do that.

        • Kathy says:

          Nathan, perhaps in your zeal to respond negatively to my post, you misread my advice. Where in my response did I suggest he only pay $500 each month on his credit card? I did not say that. Please reread my post again for clarification. In a nutshell, always leave a MINIMUM 10% of your Credit limit left (of course depending on the max amount you can afford to charge and pay off responsibly each month). Whatever the total amount charged each month on the card you should always pay the entire billed balance off each month. Foe example, I charge around $1,000 per month on my credit card which includes necessities like gas, food, etc. and other items I need. I do a budget each month to determine how much I can charge and be assured I have the money to cover what I charge. So, when it’s time to pay my credit card bill I pay the entire balance to $0. This way my credit limit is not impacted by credit scores by leaving $4,000 of credit limit in tact. Again, I only charge what I can afford to pay which allows me to pay the entire balance to zero. I recently took out a first time mortgage so my credit score fell from 820 to 790 which is typical when debt is increased initially, However, adhereing to my spending limits, paying my credit card off in full and not missing any mortgage payments in the last four years my credit score continues to rise. It is currentlly at 800. As I continue to pay my credit card balance in full and make my full mortgage payments on time each month over time my score should continue to climb. I have been following these rules since 2001 when I started with no established credit of my own and still managed to attain an 820 credit score before my first mortgage. Does this strategy work? It sure does in my opnion.

          • Brian says:

            The original commenter should leave a balance less than $500 every month and pay it off before the due date. This way FICO rewards them for excellent utilization (1-9%) but they won’t have to pay any interest. The most probable reason their credit score fell is because FICO dinged them for having a balance on a card that normally reports $0. After that initial drop, their score should rebound and surpass the score before the drop as they report excellent utilization going forward.

            TLDR; 0% utilization has about the same scoring effect as 10-30% utilization. 1-9% utilization is the best for FICO scoring.

          • Dani says:

            One should only utilize 30% or less of their overall credit limit per month in order to 1. not have huge balances to pay off every month, which I have learned is money thrown away 2. keep their credit utilization low & 3. essentially increase their credit score. The point of revolving credit is to show that you can responsibly utilize credit and not abuse credit. So, if I have a $5,000 credit limit and each month I charge up $4000+, to a potential lender, I appear financially irresponsible, as I am constantly nearly maxing out all of my available credit which is a major red flag to lenders. Now paying the balance off to zero each month does 2 things, 1. Barely affects credit score and 2. Further lets lenders know, I am a financial disaster waiting to happen. Revolving credit should do just that… revolve! So, in order to show oneself approved, there must be a balance to be seen getting paid off! Not all credit card companies report your complete payment history (i.e middle of the month pay offs, 3 payments a month, etc) Most only report what appears on your monthly statement as of the day it is generated. Example $5000 limit.. balance $2,500 due on the 15th (statement date the 5th) credit card company reports to credit bureaus on 10th of each month. You pay n full on the 13th.. you just wasted $2500 that could have gone to savings account or little Billy’s trust fund…because your updated credit report for the month will show 50% utilization due to the your payment being applied after the statement date and after the company report date (although on time just not n time to have a positive affect on this months score) SO your score decreases..so lets say 2 weeks later u charge up $300 and you allow the balance to sit until the 13th of the following month (paid before due date..and after statement and report date) NOW your score will increase.. because the credit bureaus see a HUGE decrease in your balance..from $2500 on last report to $300 on current.. utilization goes from 50% to 15 or 16% .. so the key to RAISING your score is not running up your credit to show u can drop a lump sum to pay it off on time, it is showing” I am responsible enough and financially stable enough to NOT max out credit just because it is there, then have to drop my entire pay check on paying it off, resulting in me using credit AGAIN til pay day… No! Credit is a privilege not a right.. A high score results from super limited responsible, only if I MUST usage, carrying an actual balance that the bureau can SEE being paid monthly (no more than 30% of credit limit,preferrably 10%) and most importantly KNOWING YOUR STATEMENT DATE AND WHEN YOUR CREDIT CARD COMPANY REPORTS TO THE CREDIT BUREAU..if you can make ANY payment or put a small balance on your acct by your statement date and before report date… YOU WIN! It’s all a numbers game regardless.. carrying a zero balance and 0 utilization may increase u 5 points/month whereas a small balance showing owed and paid over 2 reports consistently may increase u 30 points/every other month..so 60 points a year.. or 180 a year…the choice is in your strategy….

    • Ronald says:

      Never spend over 10% on your credit card always stay above or up to 10%. spending over 10% shows that you might have a spending problem to the credit bureau. and the bureau look at it like if you run into financial problems hown would you be able to make payments on your debt. so don’t let anyone tell you spending over 10% will help your score it actually lower your score

    • Steve says:

      Leaving a 10% balance on your card is basically telling you to fatten up the already big pockets of your banking institutions. I have always paid my cards down to 0 with the exception of some rough times. When I received similar advice as you did I started leaving balances of exactly .01 to show activity on my cards!

    • Glen S says:

      I don’t know how the scores are generated but it sounds like bad financial advice to me: letting your balance roll over will cost you interest on everything you charged that month, plus some roll-over.

      FWIW I have been paying off my CCs in full every month for over a decade and the last time I looked at my score (maybe a month or two ago) it was exactly 850…. So they obviously don’t ding you for paying off the balance in full. There’s lots of factors that go into that though, e.g. if you’re trying to improve it maybe rolling some over “looks better”, but IMHO it’s best to do the right thing for YOU and YOUR financials and NOT PAY INTEREST if it’s not absolutely necessary.

  2. Dale says:

    Live within your budget and always pay off your credit card balance(s). Use a bank demand deposit to pay for unexpected large expenses. After all, you only “park” your money in a bank because your mattress is not insured by the FDIC. That is, you don’t deposit your money in a bank because you expect a decent ROI. Bank interest rates are only good for an occasional laugh or two.

  3. Czar says:

    This is the worst advice ever. You would be digging yourself a hole you will never get out of! Always payoff your credit card in full. If you are unable to do so Do NOT use your credit card! Shame on you!

  4. William says:

    What can one do to build numeric score FICO – how can not paying off debt or caring a balance help your credit profile.

  5. Randall K. says:

    The above article was not much help , I am trying my hardest to build my credit after a chapter 7 last year …. I have $10,000 line of credit thru Capital One ( 5 different accounts ). I put $3000 in Saving every month and have over 12,000 in savings . 695 FICA score with Equifax but Transunion still rate me at 633 …. Just don’t understand the crazy difference between the big three Credit Reporting Agencies ….

    • Ronald says:

      The best way to build credit is get a unsecured card from your bank and don’t spend over 10%. use it for your gas find out when your bank report to the credit bureau. pay the card off a week before your bank report normally pay it off before the 28th of each month. And get 3 loans from 3 different banks of $500 open up a savings account at all 3 banks. put the money $500 in each account let the bank debit your loan payment out of your savings account each month. whenever the loan is paid off in full you will only have paid the interest which want be much somewhere around $97 on each loan. meanwhile your credit score will have gone up.

    • AS says:

      I too had a BK (not discharged) and had plenty of Cap One cards, but what you have to do is study what makes up the credit score. Simply having credit won’t increase the score alone. You will have to use the credit and pay it down to gain points in your credit history as well. My husband has great credit, but he doesn’t use it, so his score stays in the high 600’s.

  6. C Rivera says:

    Also to consider cards from Business that give buyers 6 to few years no interst rate if pay is on time that will nothurt either

  7. Dorothy B. says:

    Very good advice. Am trying to do just that. My credit limit amount on some cards is too high and I am going to try to lower them and then keep it there. Thanks for advice. Will check low interest rates to find out what I have.

  8. Anonymous says:

    Excellent article!

  9. Charles S says:

    The major issue is not related to payoff of credit card but pay down of revolving debt to 30% of credit limit – it depicts borrower ability to use credit responsibly. Dorothy B errs when she seeks to reduce her wonderful high credit limit (unless this expresses her tendency to allow her balance to converge on her card limit. Credit scores hinge on keeping old credit and good revolving debt is a score builder.

  10. Cecil R. says:

    Until there is a system that changes how all the Credit Bureaus control and report on consumers financial state of affairs and practices as it now exist, the consumers will forever get the shaft. The credit system is without a doubt rigged against the average consumer to keep and report the majority of consumers below established criteria and norm set up by the existing credit system, to ensure consumers are always charged the highest interest rate possible based on a very superficial credit score that not many people one other than those that established the Credit Bureaus system seem to understand. Based on my own knowledge and research I can confidently say that 9 out of 10 folks truly do not know or can explain the structure of their credit score and the complexities of why and it fluxurates. This process should be a simple open one to all consumers but we know that’s impossible and would never happen. The simple fact is that if people knew definitely how and what to do to keep their score attractive so as to always acquire the best and potentially lowest interest rate, this would deprive banks out of billions of dollars in fees and interest payments. Hence, we have the mystery of the three enterties that without a doubt has proven to hold the greatest strangle hold on consumers financial success and well being. It is kind of perplexing that this system which has an over enormerous control over so many peoples live still exist without any obstruction . Of cause, we will have a tax free society before this system is drastically changed or dismantled. Perhaps the answer is the the establishment of a dozen or mor Credit reporting agencies that has no conflicting connection with Banks and creditors.

    • Mr. Max says:

      I totally get you. But remember there are billions of dollars that are not and never paid back to the banks and this money is what funds future credit for future customers, so I don’t think it is just all a ploy to get the highest interest rate. some of the stats will show that there are more people in the higher bands of the credit score range who may have lower interest rates, however they tend to have larger credit lines, which essentially could wind up being the same in interests depending on the calculations. Just my thoughts.

    • Nathan S says:

      I don’t understand these wild conspiracy theories.

      I work in auto sales and the people with good and bad credit scores ALWAYS know how they got there. When I show customers HIGH interest rate approvals (18% or more) they are never surprised. Not even once. They know exactly how they got to their current position and it usually involves them not paying on time or defaulting on debt. Its not a bank conspiracy, its their own fault and they know it. They are usually just happy to see an approval.

      When people get good interest rates, they are usually the ones who complain, because they get 2.45% instead of 1.65%. They are very demanding because they’ve worked to build their credit and want to maximize the benefit of their time and effort.

      The only people who are left out are the people who have NO credit at the age of 40 or 50. They are the ones who only drive $2,000 cars that they pay for with cash and have never had a credit card or a mortgage. When they finally seek an auto loan, they are considered high risk, because they have essentially appeared out of nowhere to the banks as a middle aged adult with no history of responsibly managing debt.

      Whenever I have a “credit conspiracist” start this same old line with me, I respond with my simple explanation. “Mr. Jones, this is a $45,000 Suburban. Do you have $45,000 in your pocket right now?”

      The reason credit exists is because almost no one can afford to pay $45,000 cash for a Suburban, even if they were a doctor or CEO. If loans were not available, then Chevrolet wouldn’t even make Suburbans, and then all the people who work at Chevrolet producing, transporting and marketing Suburbans would not have jobs.

      Credit, AKA Debt on Demand, is the lubricant that keeps the global economy flowing, because it provides liquidity for businesses as well as individuals. The institutions who provide this liquidity charge a premium for the convenience of not having to pay cash for major purchases, and this premium is called “Interest.” If you have a history of not repaying your debts, then you pay more interest. If you have a history of paying all your debts as you agreed, then you pay less interest.

      Its really not that hard to grasp.

      • Larry P. says:

        Thank you! America seems to be full of conspiracists. While I agree Credit Reporting Agencies from time to time mess-up, in general, the system is fair. Like you said, if you manage your finances responsibly, you’d be just fine. On the other hand if you go around mismanaging your finances, then you have no one to blame but yourself.

  11. Usa Soldier says:

    To my point of view, is that if you have a credit score above 750 then just pay off your credit cards or leave them always below 10% if you are willing to feed the bank, if you save money and are ready to make a purchase, a decent down payment can lower the cost of the item you are purchasing. Be your own bank, after all you work hard to earn your money to be giving those dollars away. To me it was better to focus on the loan with the less money spent it, after you pay it off, you will have a sense of accomplishment and you will feel less tied to debt. Lets say that you are ready to purchase something in couple of months, then if you pay you card completely then it might be a good idea to charge something to make it for the 10% so your score goes up a bit. But trust me, when you have home loan, car loan, kids and all the expenses, every penny counts, don’t just give it up. If you have everything you need, then tell yourself, do i want this or need this, it will work wonders.

  12. USA Soldier. says:

    Some banks will allow you to pull money of a current loan by refinancing, ask to see if thats an option, i was paying hard my truck and i was half way done worth the value of the truck, they did actually loan me about 5k and thats how much i owned for my CC, so what i did with that money is i went straight to pay off the CC that had apr of %11.99 and now im paying that money in my truck, having as collateral for 4.9% and i feel better about myself because i was able to pay my other car that i owned, working hard, i payed off 4k in a year. Find banks that wont cancel your credit card if you dont use it and a good APR if you must get a CC. Forget all the shopping cards that give you “deals” and come down to 3 CC if you have more than that. Cut them off, throw them away, try to possibly keep the one with the longest history. Thats what really gonna matter in the long run. Most people should be able to cut down to 3 CC, one with the highest history, one with the lowest APR and one with the highest line of credit. Charge something automatically like netflix on the highest history and the line of credit and if you must really use your credit card again, use the one with the lowest APR. Dont fall again.

  13. Mr. Max says:

    I don’t think the advise is bad. I think you must apply it to your personal situation. There is not a one-fit-all solution. Do your research. Part of your credit score is also your history of paying back debt, and if it is only going to be for a couple of months, then it is actually a good thing which will increase that portion of your credit rating. Research what makes up your credit score. It is not just about having no debt. Most would say staying below 30% is acceptable to maintain a good credit score. I should know….I worked very hard to maintain my 815 rating.

  14. Bobby C. says:

    I have done a lot of research on credit scores because I had 2 major medical problems that ruined me and my credit. I could not understand how one score would be 485, another would be 650 and the other would be different also. I got my annual credit report from all three agencies and found that most creditors do not report to all 3 credit agencies, the lowest score was because most of the information they had on me was most of the derogatory accounts I had, the one at 685 had more of my accounts with a better history. I then found when I applied for credit that most companies issuing credit only used one reporting agency. I also found some creditors only report quarterly and not monthly. In other words every time you apply for credit you are rolling the dice as to which agency the creditor uses. I put in a lot of time and effort to understand how credit reporting works and how to correct problems and believe me if you will pull your annual report it will be well worth the time. I found phone numbers and addresses I had never seen or heard of. Sorry to be long winded on this but you have to stay on top of what is or is not reported to all 3 agencies. Transunion, Equifax and Experian.

  15. John says:

    Kathy, perhaps in your zeal to reply back negatively to Nathan’s post, you misread his advice as well.

  16. Lucy says:

    My Equifax Score decreased by 6 points today after my bank reported my $500 unsecured loan as paid off/zero balance unsecured loan was the status on the FICO alert. I am confused because my bank recommended getting a line of credit to increase my score and making monthly payments, but then my lender recommended paying it off and now I am 6 points lower than what I started with based on what the alert stated because I paid it off…so frustrating. I am trying to get my Equifax score to 640 so that I can qualify for certain first time home buyer programs. Any advice?

  17. Nicole says:

    Lucy, The most effective way to use the credit card to raise your scores is to never have your balance exceed more than 30% of the total limit to the card and always wait until the end of your billing cycle to pay the balance (so the balance and credit utilization rate are reported to the bureaus). Make sure you pay that 30% usage off every month. Example: Credit limit = $500; Credit purchased 500 x 30/100= $150. Therefore, you should not spend no more than $150 each month. Make sure your card has activity on it each month.

Leave a Comment

Name :

Commenting guidelines

We welcome your interest and participation on this forum, but be aware that comments will be published at Equifax's sole discretion. Please don't use this blog to submit questions or concerns about your Equifax credit report or raise customer service issues. Instead, you should contact Equifax directly for all such matters and any attempts to do so in this forum will be promptly re-directed.

Some other factors to consider when commenting:
  1. Registration and privacy. While no registration is required to visit our forum, participants wishing to post a message must register by creating an account. All personal information provided by forum members incident to registration is governed by our Terms of Use and Privacy Policy.
  2. All comments are anonymous. We'll delete your name, e-mail address, and any other identifying information, including details about your investments.
  3. We can't post or respond to every comment - As much as we'd like to, we can't post every comment, nor can we guarantee that we will respond to each individual message. All questions or comments about your Equifax credit report or similar customer service issues should be handled by contacting Equifax directly.
  4. Don't offer specific legal, tax or financial advice. All of the materials on this Site are for information, education, and noncommercial purposes only and this forum is not intended as a means of expressing views or ideas regarding any specific legal, tax, or investment advice. While offering general rules of thumb is both permitted and encouraged, recommending specific ideas or strategies regarding investments, taxes, and related matters is prohibited.
  5. Credit Repair. This blog is not intended as a venue for the discussion or exchange of ideas regarding credit repair or other strategies intended to assist visitors and community members improve or otherwise modify their credit histories, ratings or scores.
  6. Stay on topic. Your comment should be concise and pertain to the specific post in question.
  7. Be respectful of the community. The use of profanity, offensive language, spam, and personal attacks will not be tolerated and egregious or repeat offenders will be banned from future participation. We encourage disagreement and healthy debate, but please refrain from personal attacks on our WordPresss and contributors.
  8. Finally: Participation in this forum may be terminated by Equifax immediately and without notice for failure to comply with any guidelines or Terms of Use. As such, you should familiarize yourself with all pertinent requirements prior to submitting any response through the blog or otherwise. All opinions expressed in this forum are solely those of the individual submitting the comment, and don't necessarily represent the views of Equifax or its management.

Equifax maintains this interactive forum for education and information purposes in order to allow individuals to share their relevant knowledge and opinions with other members and visitors. We encourage you to participate in discussions about personal finance issues and other topics of interest to this community, but please read our commenting guidelines first. Equifax reserves the right to monitor postings to the forum and comments will be published at our discretion. Do you have questions or comments about your Equifax credit report or customer-service issues regarding an Equifax product? If so, please contact Equifax directly. All opinions and information expressed or shared in blog comments are solely those of the person submitting the comments, and don't necessarily represent the views of Equifax or its management.

Credit Archive