Can carrying a negative balance on a credit card improve your credit?

Question

Can carrying a negative balance on a credit card improve your credit?

Answer 1

No, what you need to do is actively and wisely utilize it.

Refrain from using more than 25% of your limit. A lot of people think they can max out the card as long as they pay it off....by doing this you increase your debt to income ratio which ultimately lowers your score.

Just charge a few minor things every month or 2 and be sure to pay it off in FULL and on TIME. This will start generating positive re-payment history so the card company will see how responsible (or not) you are with your card.

Cheers

Answer 2

By a negative balance, I'm assuming you mean a credit is sitting on the account.  No.  If you pay more than what is owed and you have a balance of say...$-50.00....that is no better than your balance being $0.  But.........  It is NOT good to pay off your cards to 0 every month.  That does not give the creditor any indication of spending and paying habits....  In fact, if you pay your cards to 0 every month it would in fact hurt you.  Creditors wont know that you can hold a balance, have credit available but limit your spending, and inevitably that they will be able to make money off of your business but you are a good credit risk...

Answer 3

probably not.  What hurts you financially is that the credit card company is benefiting from your money, not you.  Take your money and go to the bank and put it in savings.

Answer 4

No the way a credit card helps your credit score is to use it and pay off the balance.  If you are looking at buying a new TV.  If you have the cash go buy the TV on credit and then pay off the TV in 2-3 months.  It will cost you a little bit , but you have shown that you can use credit wisely. This helps your score. Even if you pay off the balance each month it will help.

Answer 5

No.  Your credit will improve by demonstrating moderate use and on-time payment of the monthly bill.