In todays world of Credit there are so many factors that are considered in the bureau’s determining your score. Lets consider two types of credit scores that are not that different…..actually quite similar. Lets compare a 740 and say a 680 score.
The difference points up an important fact: The higher your score, the more points you tend to lose from “bad” actions. That’s because the scoring formula is sensitive to any sign you’re getting in over your head. Maxing out a credit card is considered one of those signs.
You also should know that it typically doesn’t matter to the formula if you carry a balance or pay off that maxed-out card as soon as you get your statement. What’s usually reported to the credit bureaus is the balance on your last statement. Even if you pay the debt in full before the due date, the maxed-out card will hurt your score. So keeping a balance at 35% or less of the available balance is a good rule to follow.