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Greg Lesko Talks About Credit Scores

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Bryanna: Does a zero balance on your credit cards hurt or help your credit score? Greg Lesko of Lesko Financial has some insight. Greg…  

Greg: Thanks… There are some misunderstandings about how a credit card balance affects your credit score. The amount of debt you carry is about 30% of your score. Having a low balance on your credit cards is generally a good thing - but how low should you go? Having a zero balance can be either a plus or a minus - depending on how it got to zero.

Bryanna: When would it hurt a credit score?  

Greg: If the balance is zero because you never use credit cards, it could be bad for your score. The card issuer may stop sending reports to the bureaus and even close the account - that would hurt your score. But if your balance is zero because you use your credit cards and pay them in full each month, that would be a positive. By the way, because different card issuers report details at varying times throughout the month, your balance may not actually show up as zero on any given day.  

Bryanna: What is the best way to maintain a good credit score?  

Greg: Using credit regularly - but wisely - is a good way to keep a healthy credit score. Have a few credit cards and use them to make purchases. But make sure you pay the balances in full each month. Since payment history makes up 35% of your score be sure to pay timely on all your loans.  

Bryanna: Thank you, Greg Lesko of Lesko Financial.