Reply
Established Member
Nadar
Posts: 27
Registered: ‎09-14-2013
0

Should pay before billing/reporting date for a good credit score?

Hi, I have a discover card and I was told that they would report to the credit bureaus on the 27th of every month, which is also my billing date.

My question is this:

Suppose I had spent 100 dollars on my card out of a 500 dollar limit. Should I pay the 100 dollars into my account before my billing date which is also the reporting date so that I get good scores? And does having a zero billed amount on the reporting day affect my score?

 

 

Contributor
Jungook
Posts: 188
Registered: ‎08-02-2013
0

Re: Should pay before billing/reporting date for a good credit score?

I would like to know this as well!

 

OP, did you get to choose your billing date with Discover?

Moderator
09Lexie
Posts: 26,336
Registered: ‎09-13-2012
0

Re: Should pay before billing/reporting date for a good credit score?

I believe you meant statement closing date. If Discover is your only cc then you want it to report a sm bal -then PIF. If Discover is not your only cc, then pay the $100 before your statement date. When they update your cr, your bal will be zero.
Established Contributor
Credit-hoarder
Posts: 542
Registered: ‎08-30-2013
0

Re: Should pay before billing/reporting date for a good credit score?

[ Edited ]

Okay, before my very first statement from Pay-Pal SC hit yesterday I had charged almost $60 to the acct. Last week I paid $30 and bought it down to $29. Yesterday I received my first statement showing $25 due. I plan to pay that and leave a $4 balance. Now I also charged $23 in gas on my BP/Chase gas card and approx $50 on my Macy's card (which I just got approved for last Sat). I don't have an amount due for either just yet. So would it be to my BETTER advantage to pay these in full now BEFORE the statements hit--OR wait for the statements for both to generate first? This is my 3rd go-around with CC's and I want to make sure I get it right this time-LOL.

Moderator
09Lexie
Posts: 26,336
Registered: ‎09-13-2012
0

Re: Should pay before billing/reporting date for a good credit score?

@Credit-hoarder

Since your PayPal statement cut with a balance it's already been reported to CRAs. Pay the amount in full unless you want to pay interest. The other cards, Chase and Macy's should be PIF before the statement cuts -for max scoring.
Valued Contributor
SnackTrader
Posts: 1,566
Registered: ‎09-15-2012
0

Re: Should pay before billing/reporting date for a good credit score?

[ Edited ]
Why are you leaving a $4 balance?

Also - are you trying to maximize your score for any specific reason? FICO scoring has no memory of utilization, so having balances report this month is fine if you aren't applying for anything new. However, if you are applying for something new in 2 months from now, you will want to get those balances down to an optimum level at that time.


So - you already stated that Discover reports the balance that you own on the card on the 27th of every month. So, the idea is that you need to get that balance down to what you want reporting before that date. It sounds like you have other credit cards too, so you will need to do a little juggling act to get the optimum balances reporting. The idea is to have all cards report $0 when they report to the bureaus, with the exception of one card that should report between 1% and 9% of its overall credit limit. So, lets use Discover as the card reporting a balance. You should pay ALL your cards to $0 before they report to the bureaus, and then pay Discover down to a small dollar value ($5-$45) on the 27th. That should give you an optimum credit score, but YMMV.

In My Wallet: Amex BCP (12/12) $22.200, Cap1 Quicksilver (6/12) $14,000, Chase CSP (4/14) $12,000, Barclaycard Rewards (5/13) $10,500, Citi Forward (12/12) $9,600, Chase Freedom (12/12) $5,000

Last App: April 2, 2014
Established Contributor
Credit-hoarder
Posts: 542
Registered: ‎08-30-2013
0

Re: Should pay before billing/reporting date for a good credit score?

@09Lexie: thanks for the reply. Another question: So at this stage it's not necessary (for score purposes) to leave a small balance on the PPSC (or any other accts).? I'm not too overly-concerned about the interest on $4.

Valued Contributor
SnackTrader
Posts: 1,566
Registered: ‎09-15-2012
0

Re: Should pay before billing/reporting date for a good credit score?

Remember, interest isn't only calculated on the dollar amount leftover, there is often a minimum interest charge. So if the interest on $4 is only $0.10, you will still end up paying the minimum interest charge, which is often $0.50 or higher.

In My Wallet: Amex BCP (12/12) $22.200, Cap1 Quicksilver (6/12) $14,000, Chase CSP (4/14) $12,000, Barclaycard Rewards (5/13) $10,500, Citi Forward (12/12) $9,600, Chase Freedom (12/12) $5,000

Last App: April 2, 2014
Established Contributor
Credit-hoarder
Posts: 542
Registered: ‎08-30-2013
0

Re: Should pay before billing/reporting date for a good credit score?

@Snack Trader: so if I'm reading your 2nd to last responce correctly, on a $500 CL on my PPSC acct., I would have to leave a balance between $5 and $45 for scoring purposes--which I can't do b/c there's $25 due and would only leave $4 leftover. So I should just PIF on the PPSC this time and leave the 1 to 9% balance on a different TL. BTW: as of right now, I'm not planning to app for anything else card-wise at least until mid-late Feb. 14'.

Valued Contributor
SnackTrader
Posts: 1,566
Registered: ‎09-15-2012
0

Re: Should pay before billing/reporting date for a good credit score?

You did leave a balance between $5 and $45. For most cards, the balance reported to the bureaus is your statement balance - that would be $29 in the scenario you reported. The $4 you were suggesting would be considered "carrying a balance" since you aren't paying the full statement amount. That would have no impact on your credit, and as a result, you should always try to pay that entire amount and avoid interest. What I am describing is the difference between "reporting a balance" and "carrying a balance". In your scenario, you are reporting a balance of $29 and carrying a balance of $4.

On a different note, even a $1 balance is rumored to be rounded up to 1% for FIXO scoring purposes.

In My Wallet: Amex BCP (12/12) $22.200, Cap1 Quicksilver (6/12) $14,000, Chase CSP (4/14) $12,000, Barclaycard Rewards (5/13) $10,500, Citi Forward (12/12) $9,600, Chase Freedom (12/12) $5,000

Last App: April 2, 2014

myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.

>> About myFICO
FICO Score - The Score that matters
Click to Verify - This site chose VeriSign SSL for secure e-commerce and confidential communications.
Fair Isaac Corporation is a BBB Accredited Financial Service in San Rafael, CA
FOLLOW US Social Media Facebook Twitter Pinterest Google+
}