<p>I thought the way for young people to build their credit rating was to get a credit card w/ a low limit, use it frequently but pay off the balance at the end of the billing period.</p>
<p>It seems some young people have an app ‘mint.com’ that monitors their credit rating. ‘mint.com’ says * “Credit bureaus recommend using less than 30% of your credit cards to keep your score healthy – even if you pay off your cards in full each month.”* Is this true?</p>
<p>I’d heard that you always want to keep your balance at 40% or less…</p>
<p>Having too much revolving debt (i.e., credit card debt) hurts your score, as does maxing out the credit limit on a card. I don’t know that paying off the balance to zero each month helps your score (but it definitely avoids a finance charge).</p>
<p>A one time bump back to page one - hoping for more replies.</p>
<p>I was told that it is sometimes good to make payments on the card during the month, not just once before the due date, so it does not look like the balance ever is high. My son has begun the habit of paying his in full every Sunday when he does his banking and bill paying on line. He likes to use his credit card for everything so that he has a record, and so he gets his “points”. This habit also helps him evaluate his spending habits before he ever gets too spendy.</p>
<p>I’m not an expert, so I’m only repeating what I’ve read, but I hear that when checking your credit, prospective lenders look at your outstanding debt, not just your score number. If you pay off your credit card in full every month, that helps your credit score. However, if you pay it off, but on the specific day the lender checks, you have high outstanding balance, that hurts you.</p>
<p>If all that is true, then you could pay off your cards in full every month; then, if you buy anything where the seller would check your credit, or apply for a loan, you should pay down weekly so the outstanding number is kept low.</p>