What is better for your credit score? Paying all or some of your monthly credit card statement?

This is the problem, I am having an arguement with a co-worker that paying off all of your debt per month is better than having transferring debt month to month. I figure, you borrow money, you pay it all back, you repeat. They argue that paying a portion monthly shows you can handle credit effectively. Assume that interest rate is at zero percent, so thats not a factor. Which is better. Paying all or some of your debt?

Answer:
Both of you are right but in different circumstances.

Of course it is best not to carry any balances and live a debt free life.

This situation is ideal providing you already have an excellent long established credit history, 700+ FICO. You have proven that you know how to use credit responsibility and pay your debts on time.

Your co-worker is correct in that having a small balance carried over every month can have benefit to your score. If your score needs a boost, having a small balance and making small payments to the card can do that. This shows the credit bureau that you are demonstrating you can manage credit over a period of time. This process takes about 6 months to impact your score.

For more information on credit visit Fair Isaac's site (The created the credit score) www.myFICO.com

~Danke Schoen

MrDankeSchoen@yahoo.com
I have heard that keeping a small balance on one or two , but not all credit cards is best for maintaining a good credit score.
Both will improve your credit score. Paying in full will help with debt to income ratio and having 0 balance will improve your score. Paying just your minimum will improve your credit in that you will be building established credit history.
It doesn't make a difference. ALl that matters is that you are "current" every 30 days, and that your balance is under 50% utilization.
Especially if you have had bad credit in the past yes it is good to leave a balance and pay it of in time. Lets them know you trust yourself enough to pay monthly payment on time.
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