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Using a credit card is one of the easiest ways to build credit — you can get a credit card even if you have poor credit — but there are plenty of misconceptions about how best to do that. A common myth involves carrying a balance — that’s not paying your statement in full after each billing period, meaning you will accrue interest on the unpaid balance that spills over into your next billing cycle.

A new survey from BMO Harris Bank shows consumers are confused on how credit card balances affect credit scores: 39% of Millennials (defined as people ages 18 to 34) believe carrying a balance helps their credit scores, while 32% of consumers ages 35 to 54 believed that to be true, and only 18% of those 55 and older believe that.

Misconceptions About Credit Cards & Credit Scores

To set the record straight: Carrying a balance does not improve your credit score. In fact, it could hurt it, because the more you use of your available credit, the higher your credit utilization rate is, and credit utilization has a large impact on your credit score. Experts generally recommend keeping your credit card balances below 30% of your total available credit, but the less you use, the better.

You don’t get extra credit for paying your balances off in full every month, but carrying a balance doesn’t do anything for you, either. You really end up spending more on the items you bought with the credit card, because you eventually have to pay for them, plus interest, and unless you’re using the card to finance a large purchase, carrying a balance on your credit card may be a sign you’re living beyond your means. In short: If you’re carrying a balance purely to help your score, all you’re doing is spending more money than you need to.

The BMO Harris data are based on a survey of 1,004 Americans conducted online between July 2 and 4, with a margin of error of plus or minus 3.1 percentage points. Beyond the notion that carrying a balance on your credit card will help your credit score, the survey revealed other points of confusion when it comes to credit scores.

What Really Affects Your Credit Score

Your credit score is based only on the information in your credit reports, and because your income and education are not included in the report, they aren’t factored into scoring models. In spite of this, 23% of those surveyed believe one’s education level affects credit score.

Checking your credit scores yourself also has no effect on them, because when they are calculated using the information on your credit reports, they are not registering as a hard inquiry of your credit. A hard inquiry shows up on your credit report when a potential lender reviews your report to help make a lending decision. Soft inquiries, which involve checking your credit scores, are for educational purposes, like when a credit card company does a soft pull of your credit to see if you qualify for one of its products.

Still, 27% of those surveyed said they thought checking their credit scores could decrease their scores. The opposite is true: If you regularly check your credit scores, it’s likely you’ll make financial decisions in the interest of improving your credit, like paying your bills on time or keeping your credit card balances low. Seeing how your behavior affects your credit scores by checking them monthly makes you a more informed consumer, helping you to make better everyday choices. You can see two of your credit scores for free using Credit.com, and you can get updates every 14 days to check your progress.

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