Mar 22, 2022 - Economy & Business
2 in 3 people wrongly think a credit card balance helps their credit score
About 2 in 3 Americans incorrectly believe that their credit score gets a boost from carrying a credit card balance.
Reality check: It’s the other way around.
- One missed payment can cause your credit score to fall by 50 to 100 points once it’s a month or more late, according to LendingTree.
By the numbers: 65% of people believe that carrying a balance helps your score, including 79% of Generation Z and 73% of millennials, according to a LendingTree survey released Tuesday.
- Baby boomers are the least likely generation to misunderstand the dichotomy, but more than half still wrongly believe in the positive effects of a credit card balance.
The bottom line: Basic financial education can help prevent a lower credit score, which leads to higher borrowing costs.