Bloomberg sits down with credit expert and NerdWallet contributor Liz Weston on how to improve that three digit number that shapes your financial future. Hint: Against common perception, carrying over part of your credit card balance each much does not augment your score!
One that keeps coming up is about how carrying a balance is good for your score. I don’t know where that one got started, but it just will not die. There is no advantage to carrying a balance over to the next month. There is something now called trended data, and some credit card companies report who pays their balance down each month and who doesn't. They discovered that people who pay their balances in full are much less likely to default on a credit line. So Fannie Mae and Freddie Mac told mortgage lenders that if this information is available, they should use it in their decision in a positive way if a borrower is on the margin and might be denied. It could help push that borrower over to an acceptance.