For the past 2 years I have had 1 credit card. It is a no-annual-fee card. The credit limit is $ 6,000. Almost every month I charge 4 or 5 small purchases on this card. The card never has any more than $ 500 in charges on it. I always pay off the balance at the end of each month. I have never paid any interest or fees because I always pay it off as soon as I receive the statement. Will this practice cause my credit score to increase, decrease, or will it have no effect on my credit score ??? Yes, I realize there are many other factors that can cause my credit score to go up or down.

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This essentially will cause your score to increase at first. While some will tell you as long as your monthly balance is less than 50%, others will say as long as it is less than 35% of the limit. I have been doing some research lately and found this is true as what you are doing. Creditors like to see you are being responsible with your money. If your balance gets too high, it will cause your score to drop. The reason is, it seems as if you have extended your credit too far to where you may be in financial trouble.Having an established card with a balance at 10% or less like you have and keeping it active is good, but there is a point to where it will not cause your score to increase anymore. If you need it to increase some more, I would suggest to possibly get a cash advance and take out about 30% of what the limit is and hold onto the cash and when the bill comes in, pay it off with the money you withdrew previously. Now you are showing higher balances, but have not went about 35% of your balance and are still paying your card on time and having a more established history with higher "purchases". Do this a few times and you should see a significant raise in your score. Hope this helps.

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