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Should I pay off my monthly credit card debt before the closing date?

Frequent Contributor

Re: Should I pay off my monthly credit card debt before the closing date?

I think you should PIF almost everything except 1-5% reporting.  Usually your balance on your statement will report to the CRAs.  Pay it before your statement closes.
Where I was 8/22/08 TU 581 EQ 554 EX 615
Where I am 7/30/09 EX 737 (FAKO) EQ 689 TU 745
Can't wait to see what my scores will be when all my accounts hit the 1 year mark!
Contributor

Re: Should I pay off my monthly credit card debt before the closing date?


lessons_learned wrote:
I think you should PIF almost everything except 1-5% reporting.  Usually your balance on your statement will report to the CRAs.  Pay it before your statement closes.

Thats what i'm gonna start doing again,  but this time on i'm gonna leave a few percentage to be acquired as statement balance. I'll report back to see how much score changes over time.

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FICO pulled by loan officer on 8/3/2009
EQ: 724
EX: 740
TU: 742
Established Contributor

Re: Should I pay off my monthly credit card debt before the closing date?


Eiso wrote:

Oh shoot. I have been using my cash-back cards all these years, and I have never paid interest I just use the cards for benefits and I always pay them both in full every month. Never knew that they still report my highest balance DURING the statement period. That must have hurt my utilization ratio.

 

 


Actually you didn't hurt anything. Suppose you charged $2,000 and it was the high(est) balance that you ever charged on the card. If you paid $1,900 before the statement dropped, your closing balance on the statement would be $100. That would be the amount that is reported to the credit bureaus as your reported balance, used to compute utilization.

 

You actually had a balance of $2,000 before it had a chance to be reported to the bureaus, because you paid it before it ever appeared on your statement.. The bank however had it on record that you had borrowed $2,000 and that was your new high balance. When the bank reported your current balance as $100, it also reported that the highest balance that you had ever borrowed (in the bank's records) was $2,000.

 

Actually the was never a utilization hit for the $2k.


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Moderator Emerita

Re: Should I pay off my monthly credit card debt before the closing date?

+1

These are two different figures, reported in two different places on your credit reports. Util is calculated off of the "balance" field. The other number is there in the "largest past balance" field. It isn't crunched for any scoring purposes; it's just a display.
* 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