Is it better to pay off one credit card or reduce the balances on two?

Dear Experian,

If I am trying to raise my credit score, it is better to pay off one credit card entirely or pay down the balance of two cards without paying off either one?


Dear ECH,

The very best position would be to pay off both credit cards if you can.

Your utilization rate is the second most important factor in credit scores. Also called your balance-to-limit ratio, your utilization rate is the ratio of your total balances compared to your total credit limits.

Scoring models typically score each card’s utilization individually and then add the cards together for an overall utilization. So if paying off one would leave the utilization very high on the other, I recommend paying down both of them. That way you will have low risk utilization for each and when combined.

When you’ve paid them down, please keep going and pay them both off completely to eliminate those high finance charges. Continue to use one or both, but keep your balances well below your limits and pay the balance in full by the end of the billing cycle. That way your scores should be good and your wallet should be fatter.

Thanks for asking.

- The “Ask Experian” team