Level 6
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Credit score

Most of that is just not true.

1. You can absolutely pay the full balance, as long as you pay it AFTER your statement closing date. The important thing is to have a balance on your statement, because that’s what goes on your credit report and affects your score.

2. Having a higher credit limit will never lower your score. USING more of your credit is what will lower your score. In general, you want to keep your credit utilization below 30%, but ideally, you want to keep it below 10%. (Credit utilization = 100 times statement balance divided by credit limit.) The interesting thing about this is that it won’t affect your score in the long term; the month after you pay down a large balance, your credit score will go back up.

3. Opening a lot of credit cards is fine, but don’t do it all at once. Ideally, don’t open more than 1 or 2 credit accounts per year.

4. You can arbitrarily close newer accounts. That will actually raise your score. Closing older accounts will lower your score.

5. There’s no reason to ever lower your credit limit. If you have a card you don’t use - use it. In fact, if you don’t use a card for a while, sometimes the issuer will close your account automatically. But having a zero balance does nothing for your score. Even autopaying a utility bill or a magazine subscription on a card and paying off the card every month will help you build credit. If you have a card, use it at least once a month.