Will being too close to my credit limit on credit card hurt me?

My credit limit on my one and only credit card is $1,000. My balance for it right now is $996. When I get paid tomorrow, I am going to put at least $100 towards the card to get the balance down. Does being that close to the limit hurt you/your credit?|||Yes, it does, as 35% of your credit score is derived from the balances you carry.|||One of the major factors in calculating credit scores is the debt to credit ratio. If that's your only credit card, you're at nearly 100%, so you want your balance to be a smaller percentage of your limit. I always pay my credit card balance in full every month because the interest rates they charge are almost criminal, and if you pay only the minimum payment your balance will literally never be paid off.|||Yes, but the big question is how much.





Personally, I'd pay off as much of the $996 as possible.|||You should really try to avoid getting that close to your limit since going over will cause a fee normally. They will often raise your limit if you ask.





Having a higher limit affects your credit score in part because by having the ablity to get into more unsecured debt is bad if it is more than about 10% of your annual income. But being near the limit of your card is bad too. I have actually ask to lower my credit limit at times because it had a bad effect on my credit score.