Debunking a credit score myth. No, you shouldn’t leave a balance on your card.
There is soo much wrong with this article, where do I begin?
#1 The writer is incorrect that carrying a small balance on a credit card is not good correct, it actually is. However to clarify, the reason the lender in this example gave, is dead wrong. Credit cards will report and update regardless of whether they are used in a given month or not. However carrying a small balance(ON ONLY ONE CARD) does in alot of cases lead to a slightly higer score becase it prevents a specific “reason code” from triggering.
2. The other mistake this writer made was to ask a “real estate expert” thier opinion on what the mortage lender said, in this case. In either situation you are speaking to someone who is not an expert in FICO scoring. The “Real Estate Expert” also was dead wrong about “different ypes of credit lines” being a key component. Actually having a healthiy “Mix” of credit does amtter, but it accounts for only 10% of the FICO calculation.
The takeaway from this is, dont ask your tailor for advice on buying a diamond ring. He/She may have an opinion, but is not qualified to give it.