How does credit utilization work?

Question

For example, if I have a $250 credit line and spend it all in a month then repay it next month, will that raise my score?

In: 1

Answer 1

Paying your entire balance off each period = good; paying on time = good. Charging up to your entire credit allowance = bad. As another commenter said, you want to keep your utilization below 30%.

From CreditKarma:

* Credit card use matters most for each individual card.
* The average use across all your cards is important, too.
* Try to stay under 30% (under 10% is even better!) — and remember, you don’t need to carry any credit card debt to build your credit.