@Anonymous wrote:
thanks- that aspect I understand. However, isn't paying anytime during the current statement cycle accomplishing the same thing?
For example, I assume that my December statement cycle is hitting the curent score; most due dates are between the 10th and the 25th of the month. If I pay them all today, why would that affect the scores differently than paying them 3 days before the due dates? The January statement cycles would have the same balances either way.
Just curious, and trying to learn. :-) BTW, I pay electronically, and do base the payments mostly on the due dates.
thanks!
No, not necessarily. Most CCs will report the balance you had on your statement date and they will only report one time per month around that statement date. When you or a lender pulls your FICO score, the score is being calculated based on what is reported to your CR at that moment. If you paid in full a credit card by the due date, but use it again prior to the statement date, then that credit card company can end up reporting a higher balance to your credit reports when the statement cuts.
For example, let's say your due date is 1/15 and you have a balance due of $1000. Let's say you pay it with the full intention to get $0 to report and you paid the $1000 by the 1/15 due date. You now have a $0 balance CC as of that moment. Typically, statements will cut 3-5 days after the due date. So, hypothetically, you can have a statement date of 1/18. If you use that newly paid $0 balance CC after the due date but before the statement date, and let's say you spend $1500 on whatever, then $1500 could report if the transaction clears before the 1/18 statement date. Instead of $0 reporting on your credit reports, a higher balance reports of $1500 because your CC will report the balance you had on the statement date.
In my mind, I have two due dates. One is the CC due date and always pay by then. The other due date in my mind is the statement date. I make sure I have a payment into them on or before the statement date to make sure I get the balance to report what I want to report. Usually, I'll pay once in full by the due date and then shelve the card until the statement cuts.
