pay in full vs. balance

[JcT21]

‎02-26-201408:54 AM

i get conflicting comments regarding which is better, using my cards and paying off before the cycle date or to carry a low balance so something is reported to the bureau's.  i have all my cards paid off and have been using them for small purchases like gas & dinner and then paying them off before the cycle date.   which is best?  my current utilization is 4%   do the cards have to show a balance in order for something to be reported to the credit bureau?  will it still show pays as agreed even though i have a 0 balance?

[JcT21]

i get conflicting comments regarding which is better, using my cards and paying off before the cycle date or to carry a low balance so something is reported to the bureau's.  i have all my cards paid off and have been using them for small purchases like gas & dinner and then paying them off before the cycle date.   which is best?  my current utilization is 4%   do the cards have to show a balance in order for something to be reported to the credit bureau?  will it still show pays as agreed even though i have a 0 balance?

[titanofold]

For score optimization you want all but one CC reporting $0. That final CC you want to report between 1% and 9% of its CL.

You may use the cards how you like, but you want to use them in lieu of using your check card or cash so you're able to PIF each month.

You only need to worry about optimization when you're going to apply for a new TL or if you're seeking a CLI. The FICO score has no memory of your utilization.

As long as you're paying as agreed or better than agreed, it will report as pays as agreed to the bureaus. The CCCs, however, only report when there's something to report. Typically they'll report monthly, but some won't report unless there's a change to the balance or the CL besides you making a payment.

[NikoD]

While I can't impart any words of wisdom, I can give you some anecdotal evidence that not ever carrying a balance doesn't hurt you. I've never had a mortgage or a loan of any sort. The only thing that I know of that would be on my credit report would be my CCs. I've had my two current cards since 1997 and 1998 so that helps. However, I pay the balances of in full every single month. I haven't carried a balance even for a single month in many many years. Even though my file is skimpy, Discover just told me my FICO score is 828.

[user5387]

Paying after the statement date is not the same as carrying a balance.

Your activity is reported to the bureaus, even if you pay before the statement date and therefore show a $0 balance.

[Pat94108]

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@user5387 wrote:

Paying after the statement date is not the same as carrying a balance.

Your activity is reported to the bureaus, even if you pay before the statement date and therefore show a $0 balance.

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+1 Many people are confused by that. 

[NikoD]

What does "after the statement date" mean? Do people think that if they pay even before they get the CC statement that that makes a difference? As long as you pay before the due date so nothing is rolling over into the next month, I thought it didn't matter if you pay it off the day you made the purchase or the day your CC payment is due. Or am I confused about what you guys are talking about here?

[user5387]

Balances reported to the credit bureaus play a big part in scoring.  It's the utilization angle.

Reported balances are typically those of the statement date.

[titanofold]

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@NikoD wrote:

What does "after the statement date" mean? Do people think that if they pay even before they get the CC statement that that makes a difference? As long as you pay before the due date so nothing is rolling over into the next month, I thought it didn't matter if you pay it off the day you made the purchase or the day your CC payment is due. Or am I confused about what you guys are talking about here?

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Statement Date: The date the statement is generated.

From what I've seen, the statement date is the same as the reporting date. If you pay off your card before the statement is generated, a $0 balance gets reported that month. If you pay after the statement date, a balance is reported.

[aubie1kenobie2]

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@NikoD wrote:

What does "after the statement date" mean? Do people think that if they pay even before they get the CC statement that that makes a difference? As long as you pay before the due date so nothing is rolling over into the next month, I thought it didn't matter if you pay it off the day you made the purchase or the day your CC payment is due. Or am I confused about what you guys are talking about here?

The date the payment is due is different from the statement date for most cards. If you pay after the due date, that's a late payment. Any amount you don't pay off before the statement gets generated (typically a few days after the due date that month) is the balance that gets reported to the credit bureaus.  

[JcT21]

well thats what im doing at the moment.  im paying off my balances before the new statement date so all of my cards (6)  except 1 (capitalone quicksilver) report a 0 balance.  the one that does report a balance ranges from 15-50 dollars.    my EQ score has jumped 6 points but my others have stayed the same this time.