“To build credit, what you want to do is have a demonstrated track record of using credit responsibly, and over time different forms of credit,” McBride says. “With regard to revolving lines like credit cards, you want to demonstrate the ability to put expenses on the card and then to pay that off.”
To demonstrate that ability, it’s smarter to focus on not letting your balance exceed more than 10 percent of your credit limit at any given time.
“The 10 percent threshold is the point at which it’s beneficial to your credit score,” McBride says. “Between 10 and 30 percent it’s neutral, and it’s only when your balance is above 30 percent of your credit line that it actually works against your score.”