Rant: carrying a balance doesn't help your score at all

I keep seeing people say you need to carry a balance month to month to build credit. That's wrong. I paid off my $2,800 Chase card in full every month for 3 years and my score hit 780. Has anyone else had a bank tell them this myth?

2 comments

2 Comments

emma_mitchell1d ago

I had a Chase banker literally tell me I needed to carry a $20 balance on my $2,000 card or my score would drop. I was like wait, what? So I left it there for two months out of fear, ended up paying like $3 in interest for no reason. Then I did some research online and found out it's a total lie. My score actually went up a few points after I paid that tiny balance off completely the next month. It's wild how many bank employees still push this bad advice. They should really train their staff better because people lose money on it.

nora_chen1d ago

Oh I gotta push back on this one @emma_mitchell, respectfully. That Chase banker might have been dinged up by bad training for sure, but there's actually a kernel of truth here (just poorly explained). The thing is, credit scoring models do sometimes penalize you for having a $0 balance across all cards, like a weird scoring quirk where they see zero utilization as "inactive" and that can ding you a few points. I've seen my own score drop 10 points once when I paid everything to zero, then bounce back the next month after a tiny charge posted. So while paying $3 in interest sucks, the banker wasn't totally making things up they just communicated it terribly. The real fix is to let a small balance report but pay it before the due date, so you get the utilization reporting without paying a dime in interest. But yeah, they definitely should train them better instead of leaving people confused like you were.