[smt88]

This would be hard to argue against if credit scores were accurate. They're not exactly pseudoscience, but they're still far from perfect.

When I was buying my house, I was building up and paying off ~$500 across 4 credit cards (one for Home Depot, one for Uber, etc.) I paid them down to $0 every month.

I'd consider that behavior to be financially smart. I got discounts of 5% on all those purchases because of the perks of the cards.

I was shocked by the score the bank had given me, since I do monitor my credit. They told me I had to stop using all those cards. I did, and my score went up 100 points instantly.

[dahdum]

You didn't mention what that utilization rate was, but it makes perfect sense to me. Using those cards so much gave the impression that you "needed" the credit line, even if you paid it off by the end of the month.

If you have a $50k limit and spend $2k/month, paying off in full, it doesn't really impact your score much at all. If you have $1k limit and spend $500/month it's a big risk.

You can usually make additional payments during the cycle so it doesn't impact your utilization. Whenever I make a larger purchase I just login and pay it off in full right away so it doesn't ding me.

[sjg007]

Utilization rate is 0 if you pay off every month..

[dahdum]

That’s not accurate, you can read more here: https://www.thebalance.com/understanding-credit-utilization-...

[smt88]

The utilization rate was ~1%.