Answer: -People think that having a balance raises your credit score because it records "payments" each month. But that's not true. The only thing that a credit card reports is if you are "current", "30 days late", "60 days late," etc. Having a 0 balance and thus no payments is the same as being "Current". Also, that balance should be below 33% of your limit-- so if you're above 1/3 the limit (like if this was a $1000 card) you'd be helping to pay it off. -it is better to pay off the credit card and continue to make small purchases paying the balance off completly every month. a remaining balance incurrs interest fees which you do not want. Having the credit card open for a year, showing you pay the entire balance every month boosts you credit score (called revolving credit). -I'm cutting and pasting this from a similar question that I've just answered, but the utilization part applies here:If you're looking to improve your credit score, keep in mind that credit utilization is one of the most important factors in calculating your FICO score.That being said, suppose you have a credit card for $500 and another for $1000, both maxed out. To achieve 50% utilization for each, you'd have to pay $250 towards one and $500 to the other. Overall this would have a better impact on your credit score than paying cards off randomly, or paying off one in total and leaving others maxed. If you can't pay off all of your debt at once, I would recommend setting a goal of getting your balances to 50% across the board. Start with the lowest balances first - you will see an immediate impact if you pay $500 towards a balance of $1000 as opposed to paying that same $500 towards another card with a balance of $3000.