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

Credit scores are basically supposed to measure how likely you are to repay your debts. The most obvious way to do that is…have debts and repay them.

So yes, spending your credit line and repaying it on time helps raise your credit score. $250 is pretty low compared to most debts so it probably doesn’t raise it *much* but it established that you could get credit and responsibly use it, so that’s the start.