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[quote=Anonymous][quote=Anonymous]Carrying a balance actually helps your credit rating, as long as you always make your payments on time. Creditors want customers who pay interest.[/quote]

Not really. Carrying an open account that shows up without delinquencies is what you want. Creditors want both people who pay in full every month and those who carry interest. They are both profitable just in very different ways. That said, carrying debt is generally a stupid way to "help" your credit rating because (1) It isn't necessarily the case it will, (2) Its an absurdly expensive proposition for the customer, (3) if you dont get it just right, your debt to income ratio can make you less attractive or even ineligible for products.

You want to improve your credit score? Keep your accounts open for a long time, don't apply for new credit frequently (hint: open and close accounts on the same day if you have to), and pay off your bills on time. Double Pro tip: have kids? Add them as co-signers on your card; depending on the bank this may or may not be reported to the bureau, but if it is, tada, your college graduate has a 750 FICO.

Source: my day job
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