PIF or multiple monthly pmts on your credit cards? Does it really matter?

[skorpyo3]

Good evening! I've worked very diligently to rebuild my credit these past few years after BK. The forums have given me tremendous support and sound advice. I truly appreciate the feedback and support I've received.  I'm hoping that I can get some advice about credit card payments. I do prefer to pay my credit card bills a few days before my statements close, to avoid balances being reported. Occasionally,  I may have one card report a balance under $25. I have made multiple payments on a few cards in the past, but now I just PIF. What's your experience with lenders? Any tips or advice you can share? Thank you! 

[Dahlia77]

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@skorpyo3 wrote:

Good evening! I've worked very diligently to rebuild my credit these past few years after BK. The forums have given me tremendous support and sound advice. I truly appreciate the feedback and support I've received.  I'm hoping that I can get some advice about credit card payments. I do prefer to pay my credit card bills a few days before my statements close, to avoid balances being reported. Occasionally,  I may have one card report a balance under $25. I have made multiple payments on a few cards in the past, but now I just PIF. What's your experience with lenders? Any tips or advice you can share? Thank you! 

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If you pay all your credit cards down to 0 before the statement cuts you are showing no activity when they report to the bureaus.  While you may prefer it, you would be better served allowing one card to report a small balance of 1-9% of your credit limit on that card.  All cards at 0 and one reporting.  That seems to be the optimal method for fico scoring.  Also if you have all cards reporting 0 all the time it doesn't really demonstrate usage of the cards.  I'm sure if you started to let one report, your Fico's would most likely start to rise.  Someone more seasoned can step in and give a more articulate answer but that is what I've learnt from reading these boards and what I practise and I believe you'll probably get the same advise from others.  Lenders do like to see usage and the fact that you're repaying.  Good luck!

[skorpyo3]

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@Dahlia77 wrote:

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@skorpyo3 wrote:

Good evening! I've worked very diligently to rebuild my credit these past few years after BK. The forums have given me tremendous support and sound advice. I truly appreciate the feedback and support I've received.  I'm hoping that I can get some advice about credit card payments. I do prefer to pay my credit card bills a few days before my statements close, to avoid balances being reported. Occasionally,  I may have one card report a balance under $25. I have made multiple payments on a few cards in the past, but now I just PIF. What's your experience with lenders? Any tips or advice you can share? Thank you! 

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If you pay all your credit cards down to 0 before the statement cuts you are showing no activity when they report to the bureaus.  While you may prefer it, you would be better served allowing one card to report a small balance of 1-9% of your credit limit on that card.  All cards at 0 and one reporting.  That seems to be the optimal method for fico scoring.  Also if you have all cards reporting 0 all the time it doesn't really demonstrate usage of the cards.  I'm sure if you started to let one report, your Fico's would most likely start to rise.  Someone more seasoned can step in and give a more articulate answer but that is what I've learnt from reading these boards and what I practise and I believe you'll probably get the same advise from others.  Lenders do like to see usage and the fact that you're repaying.  Good luck!

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Thank you! I appreciate your feedback. I just looked at my Experian and Equifax credit reports and both show my highest balance with all credit cards, so I believe this does show lenders that there was definitely usage and activity. Am I wrong??

[compassion101]

I PIF on the due date or the day before. I use the float and have an extra 3k to invest, which is worth alot more after 30 years. If I am applying for credit I may pay them off that month before the statement cuts if I need to maximize my score.

[skorpyo3]

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@compassion101 wrote:

I PIF on the due date or the day before. I use the float and have an extra 3k to invest, which is worth alot more after 30 years. If I am applying for credit I may pay them off that month before the statement cuts if I need to maximize my score.

 Thank you! So am I going about it the right way to best maximize my score and credit history?

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[compassion101]

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@skorpyo3 wrote:

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@compassion101 wrote:

I PIF on the due date or the day before. I use the float and have an extra 3k to invest, which is worth alot more after 30 years. If I am applying for credit I may pay them off that month before the statement cuts if I need to maximize my score.

 Thank you! So am I going about it the right way to best maximize my score and credit history?

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Yes if you pay before the statement cuts and leave a small amount on one card it should give you the best credit score possible for that moment in time only, but does not help your score down the road. Your credit history doiesn't change as long as you pay the minimum by the due date.

As an example, say you and me have the exact same credit and scores of 700 and normally let the balances report and pay them off at due date. Well, if you start paying off before the statement cuts every month then your score will jump, lets say to 715 while mine stays at 700. 8 months down the road I need to apply for some credit, so I pay off before statement cuts, My score will now also be 715, same as yours. You don't receive a history or long term advantage for paying before statement cuts, only short term. In my mind, I had extra money for 8 months that I could do something with, while you had 15 points better on credit score but nobody knew except you and they guy who you told on MYFICO. I'd take the money every time, unless you fear some AA or think you might surprisingly need to apply for some credit suddenly. But to each their own.

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[Kmon]

A lot of people seem a little anal about always paying in full but I have let high as 50% util show as long as you pay it off not making minimum payments of course it shows you can handle your debt.

[skorpyo3]

Thank you everyone for your thoughtful replies! I should have mentioned that this is a short term strategy. My BofA secured card is supposed to unsecure in several months, and I want to ensure it does. I spoke with a few credit analysts who told me my plan was great. Also, I have several new cards that I would like to get a CLI on. I am in the garden, and want my existing cards to grow, as well as boost my Fico score for the mentioned reasons. BofA looks at TU for graduation and that's my lowest FICO. They did mention that FICO was not  as important as my overall credit worthiness.

[SecretAzure]

While on this topic I have a question that is relevent. 

Does reporting a balance of $0 equate to having a balance of less than 1% total CL?

I seem to be losing FICO points occasionally for lowering (or PIF) my debt. I'm wondering if because my reported balance is less than 1% of my overall CL. 

Thanks in advance

[Anonymous]

PIF when statement cuts if you're just in normal mode.

PIF before statement cut on all but one in case you're in new account mode.