2: Spread balances to increase credit score
Truth: Spreading out credit card balances over multiple credit cards can actually have a negative impact upon credit scores. Credit scoring models like FICO and VantageScore use a variety of factors to determine scores.
The second most important metric in credit scoring is debt load, or the amount and type of debt on your credit obligations.
The fewer accounts you have with a balance the better it is for your credit scores. Having a credit card with a zero balance is also very likely to have a positive impact upon your credit scores since cards with zero balances have a debt-to-limit ratio of 0%. The debt-to-limit ratio is a term used to describe the relationship between your credit card balances and your credit card limits.
When it comes to credit card debt the best strategy is to never revolve balances from month to month. However, if you are already in over your head in the credit card debt department then it is best to find an effective way to pay down your credit cards rather than spread out the balances.
If you cannot afford to pay off your credit cards, a consolidation loan might be worth considering, as long as you have the discipline not to charge your credit card balances back up once you have paid them off.