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By Taylor Tepper
May 6, 2016

Does carrying balance improve my credit score?

No. No. No.

A credit card is an unsecured loan. If you don’t pay off your card every month, you have to pay interest on the amount you owe. The average annual interest rate is 18%, according to NerdWallet, which can cost you a lot of money.

If you want to improve your score, only use about 20% to 30% of your credit limit and pay off your balance each month.

Also, be patient. It takes time to build up a solid credit history. There’s no magic bullet.

Advertiser Disclosure

The purpose of this disclosure is to explain how we make money without charging you for our content.

Our mission is to help people at any stage of life make smart financial decisions through research, reporting, reviews, recommendations, and tools.

Earning your trust is essential to our success, and we believe transparency is critical to creating that trust. To that end, you should know that many or all of the companies featured here are partners who advertise with us.

Our content is free because our partners pay us a referral fee if you click on links or call any of the phone numbers on our site. If you choose to interact with the content on our site, we will likely receive compensation. If you don't, we will not be compensated. Ultimately the choice is yours.

Opinions are our own and our editors and staff writers are instructed to maintain editorial integrity, but compensation along with in-depth research will determine where, how, and in what order they appear on the page.

To find out more about our editorial process and how we make money, click here.

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