- by C.C.
Having a high credit balance
Even if you make your payments on time every month having a high credit balance can hurt you. It goes back to that credit utilization rate, which affects how lenders view your creditworthiness.
Having a low credit utilization rate will earn you a better score than if you’re close to maxing out your cards. Paying off your card every month doesn’t guarantee a low credit utilization rate.
Your available balance and credit limit are generally reported when your billing cycle closes. This means that even if you pay off your balance in full each month, getting close to reaching your credit card limit can lower your score.