PhotoThere are several things consumers can do to raise their credit score, but carrying a credit card balance is not one of them.

Yet, a new survey from CreditCards.com shows 22 percent of consumers have carried a balance on the mistaken belief that it would add points to their credit score. All they got was a higher interest charge.

Having a credit card account does help your credit standing. Consumers get points when a lender extends them credit.

They get even more points when they use credit wisely. Paying off the balance each month makes a consumer look responsible in the eyes of a lender. On the other hand, utilizing too much of their credit line on an ongoing basis can drag down a credit score.

New idea

The idea that carrying a balance raises a credit score may be relatively new. The survey showed the younger you are, the more likely you are to believe it.

Education also plays a role. Twenty-seven percent of cardholders without a college education have carried a balance, thinking they'll help their credit score. Only 12 percent of college graduates have done so.

"It's painful to know that so many millions of Americans are essentially attempting to pay their card issuers to improve their credit scores," said Matt Schultz, CreditCards.com's senior industry analyst. "The fact of the matter is that carrying a balance will never improve your score."

With interest rates now rising, Schultz says consumers should make every effort to pay off their credit card bills in full each month. At the very least, they should pay on time.

Pay on time

Paying bills on time is one of the most important factors affecting credit scores. Paying on time will raise the score, missing a payment or paying late will drag it down.

Yet 42 percent of the consumers in the survey admitted to being late in paying their credit card bill -- with 24 percent doing so more than once. Schultz says many of these late or missed payments might have been avoided with a little organization.

Seventy-one percent of cardholders who said they missed a payment did so because they forgot to pay it, were busy, or were out of town. In addition to damaging a credit rating, a late payment can be costly, since most credit card companies assess a late fee of $30 or more.

Unfortunately, there are other reasons consumers missed credit card payments. Among those who are habitually late in making their payment, the most often cited reason is not having the money.


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