When should I pay off my credit card?

[Anonymous]

When is the best time to pay off your credit card, so that it will benefit your credit score? My credit card payments are due on 7th of every month. And the credit reports are usually updated on 10th- 14th.

I am asking this because my credit utilization has been 0% since the last two months, and no matter how much i use, it doesnt showup on my credit report. Maybe its because i pay it off sooner which leaves 0% utilization on my credit card? And because of this, my credit has been intact since quite a while.

I just got my first card four months ago, so I am pretty new to this.

Any advice would be greatly appreciated Thanks

[Anonymous]

The CC issuer will report whatever balance is on the card to the three bureaus on the day that the statement prints.  Because you are rushing to always pay the card down to $0, the statement never has a chance to print with a positive Amount Owed at the top.

The tricky part for a person who has his first card is that you want it to report a small but positive balance each month.

The easiest way to do this is with a two-payment approach.

(1) Pay the card down to $5 a few days before the statement prints.  (Or it could be a week before, whatever.)

Then, shortly after the statement prints,

(2)  Pay the balance in full

Then continue to use your card to run up at least another $5 in purchases.

#1 will make sure that the card reports a small but positive balance.  #2 will make sure that you have paid that small balance in full well before the due date.

[Anonymous]

Congrats on getting your first card.  We can suggest some "next steps" (for the next 6 months) that will help your score go up a good amount, both in the short term and long term.  Let us know if you'd like to hear those.

[Anonymous]

Ofcourse yes! Thanks

[Anonymous]

Thanks CreditGuyInDixie for your response. I really appreciate it.

[Anonymous]

So you recently got your first credit card.  Do you have any other accounts?  Loans for example?  Anything else?

What tools are you using to pull your credit reports?

[Anonymous]

Credit Karma

[Anonymous]

Do you have any other accounts?  Loans for example?  Anything else?

[Anonymous]

No..nothing at all

[Anonymous]

Great.  Then here are some possible next steps for you.

(1) Continue to use your CC and keep it reporting a small balance each month.  Like $10 say.  You can use it a lot, just make sure it reports a small balance to the CRAs.

(2)  Read up on the SS Loan Technique.  Just read the first 2-3 posts here:

http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Adding-an-installment-loan-the-Share-Secu...

If you decide it is right for you, you can get started with it now.

(3)  Six months after you opened your first account, you will be eligible for your FICO scores.  At that time, use the $1 trial offer at Credit Check Total.  That will give you all three reports and your three FICO 8 scores.

(4)  Armed with the knowledge of what your scores are, you will be able to know what cards are within your reach.  There are various ways you can find out if you are "pre-approved" for cards as well.  The folks on the CC forum can tell you all about how to do that, though I would not try doing that until you have your true FICO scores.

Apply for two more credit cards.  Tend to look for ones you like, which have no annual fees, and which you could keep for a long time.  Having at least three credit cards will enable you to have a much better score in the long run than if you only have one.

(5)  Moving forward, use all three cards naturally.  Never buy things you don't need, and it is ok if you don't use any particular card for three or four months..  Any time you decide to apply for a new loan or credit card, make sure you get all your cards reporting $0 except for one, with the remaining card reporting a small balance, like $10.