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New Contributor
Posts: 74
Registered: ‎01-25-2010
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How does one pay cc bal in full each month to prevent it from showing up on credit report?

I just received a new cc card(unsecured) from my bank. I opened this new account because I want to raise my credit score and because I had no revolving credit. Anyway, after reading many of the posts here I'm hearing a lot about paying off full bal each month. So, my question is when should I make the payments; a few days before the statement comes out (which I do not know when), or soon after I receive the statement??? Help me out here.

Valued Contributor
Posts: 2,691
Registered: ‎07-29-2009
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Re: How does one pay cc bal in full each month to prevent it from showing up on credit report?

What's important is that you try to pay the statement balance each month. When you pay it is up to you.

 

If you want to maximize your FICO score, the way to do that would be to go online and pay your balance 2-3 days before your statement will cut. You may have to call your credit card company to find out your statement date. Some of my cards have the same statement date each month, and some vary by a day or two.

 

Congratulations on your new card!

Frequent Contributor
Posts: 429
Registered: ‎06-11-2008
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Re: How does one pay cc bal in full each month to prevent it from showing up on credit report?

Why not pay it as soon as the bill comes?
“Faith is taking the first step even when you don’t see the whole staircase.”
Regular Contributor
Posts: 183
Registered: ‎07-21-2007
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Re: How does one pay cc bal in full each month to prevent it from showing up on credit report?

Because that woud not stop it from reportinga balance.
Valued Contributor
Posts: 2,691
Registered: ‎07-29-2009
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Re: How does one pay cc bal in full each month to prevent it from showing up on credit report?


missypants wrote:
Why not pay it as soon as the bill comes?

 

Hi missypants...

 

Most people do wait until their statement comes and then pay in full. If trying to maximize FICO, however, that doesn't work well.

 

Even if you pay in full when you get the statement, it is the statement balance that is reported to the credit bureau. So, for example, if I had a $5k credit limit card, and I charged $4.5k on it this month, and I pay it off when I get the bill, that's all OK. The problem is that $4.5k debt on a $5k card is a 90% utilization rate...and that's what my FICO score would be based on because the $4.5k was reported to the credit bureau.

 

My husband and I found that out when we applied for a mortgage on an investment property. We put on the app that we had no credit card debt. Then we got the call from the loan officer asking about the $6k in credit card debt that showed on our reports. We had paid it off when we got the statement, but it still showed and was counted in our FICO.

 

Many people pay before the statement cuts only when they are trying to tweak their scores for a mortgage, car loan, etc. But...remember...it takes an entire reporting cycle to change that reporting, so...for us...it's easier to just do it out of habit.

Super Contributor
Posts: 5,759
Registered: ‎01-28-2008
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Re: How does one pay cc bal in full each month to prevent it from showing up on credit report?


rosa29617 wrote:

I just received a new cc card(unsecured) from my bank. I opened this new account because I want to raise my credit score and because I had no revolving credit. Anyway, after reading many of the posts here I'm hearing a lot about paying off full bal each month. So, my question is when should I make the payments; a few days before the statement comes out (which I do not know when), or soon after I receive the statement??? Help me out here.


Congratulations on receipt of your new card.  To prevent a balance from showing on your credit reports, you want to PIF before the due date.  When PIF prior to the due date, you do not want to use the card again until after the statement generates. 

Senior Contributor
Posts: 3,197
Registered: ‎01-24-2010
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Re: How does one pay cc bal in full each month to prevent it from showing up on credit report?

[ Edited ]

You have to know what day of month they report to credit bureaus.  Post the bank and someone here can tell you.

 

You need to pay online to play this game well.  In addition to making your normal payment.   You should pay the current balance online a few days before report date, and don't charge anything until after the report date. Then you can hit zero balance.

 

You only need to play this game if you are planning to apply for credit or credit increase soon.  

 

From what I have read, and only having 1 account.  I think having a balance of less than 10% utilization would give you almost the same score as zero balance.  

 

 

Message Edited by Wolf3 on 01-30-2010 08:50 AM
New Contributor
Posts: 74
Registered: ‎01-25-2010
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Re: How does one pay cc bal in full each month to prevent it from showing up on credit report?

Okay wolf3, I understand that part; so how do lenders view a zero balance? For instance, If my report shows a zero bal at the time I apply for new credit, how will the new lender know that I pay on time. Doesn't a zero bal appear as if I never used the card? Again, if I pay or have paid my cc bal in full each month for maybe six month, then apply for new credit, how will a lender know I made payments on time if there is a zero bal?

New Contributor
Posts: 74
Registered: ‎01-25-2010
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Re: How does one pay cc bal in full each month to prevent it from showing up on credit report?

I am very prepared to play the game because I want to raise my score, so will the bank tell me what day they report to the bureaus? Is that free info.?
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Posts: 28,095
Registered: ‎04-01-2007
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Re: How does one pay cc bal in full each month to prevent it from showing up on credit report?


rosa29617 wrote:

Okay wolf3, I understand that part; so how do lenders view a zero balance? For instance, If my report shows a zero bal at the time I apply for new credit, how will the new lender know that I pay on time. Doesn't a zero bal appear as if I never used the card? Again, if I pay or have paid my cc bal in full each month for maybe six month, then apply for new credit, how will a lender know I made payments on time if there is a zero bal?



Good questions!

The fact that you have used your cards during the month does show on the full report pulled by lenders when you apply, even though you have a string of $0 balances.

I've been doing this for several years now, and at the times that I've applied since then, I've gotten nice comments from the lender CSR's.

They won't make interest money off of me, but they will make money in transaction fees when I use the cards.
* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007

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