Mar 22, 2022 - Economy

2 in 3 people wrongly think a credit card balance helps their credit score

Percentage who believe carrying a small balance on their credit card helps their credit score
Data: LendingTree; Chart: Baidi Wang/Axios

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.

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