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Does Paying Off Credit Card Hurt Credit Rating?

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Jul 21, 2009 3:42 pm US/Pacific

Does Paying Off Credit Card Hurt Credit Rating?

(CBS13)

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Question: Does paying off credit in full hurt credit rating? Your insight into what would be the best way to proceed would be much appreciated. A little advice would go a long way right now. Thank you.

- Kim

Answer: Paying off your credit in full does not hurt your credit rating. In fact often times what will negatively affect your credit rating is carrying a credit card balance that exceeds 1/3 of your available credit on that particular card. You should also keep your credit lines open even after paying them off. Closing credit lines can negatively affect your credit rating.

- David
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Money Matters is provided by:
David Schauer, CFA, MSFA, CFP®
Financial Planner
Hanson McClain