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Established Contributor
Posts: 825
Registered: ‎12-28-2011
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paying in full on credit report?

Correct me if I'm wrong but the creit card balance that gets reported on one's credit report is just the statement balance at the end of the month, which doesn't really tell if you pay in full when you get the bill or are actually carrying a balance with interest. Same goes for paying in full before the statement due date - a $0 statement balance can also mean you didn't charge anything on that credit card for the month. If someone pays in full every month, is that somehow reflected on the credit report and does it improve the FICO score at all?

 

A newbie here, thanks for your help!

Moderator Emeritus
Posts: 5,267
Registered: ‎03-18-2008
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Re: paying in full on credit report?


dyv8914 wrote:

Correct me if I'm wrong but the creit card balance that gets reported on one's credit report is just the statement balance at the end of the month, which doesn't really tell if you pay in full when you get the bill or are actually carrying a balance with interest. Same goes for paying in full before the statement due date - a $0 statement balance can also mean you didn't charge anything on that credit card for the month. If someone pays in full every month, is that somehow reflected on the credit report and does it improve the FICO score at all?

 

A newbie here, thanks for your help!


Correct.  The statement balance is what is reported and is what is used to calculate your FICO score.  So, if you have $5000 in CL and max it out, it will have a negative effect on your FICO score even if you pay it in full each and every month.

 

If your pattern of CC use results in a high level of utilization once your statements post, then you can try what many other PIFers do to boost their score - pay you entire balances BEFORE the statements close.  So, if the last day of your statement is January 20, go online on January 19 and pay off the balance.  Your statement will close with a zero balance which will improve your utilization.

 

It's generally advised to let one card report a small balance each month, so your credit report reflects active use of your credit cards.

 

The credit reports that we get from this site only indicate whether payments were made on time, not the actual amount paid.  However, as I recall my Experian report that I got through annualcreditreport.com now reports the monthly payment amounts (which reminds me, it's been about a year since I last got my free EX report).  Since the data furnished to prospective creditors may be more complete, it is possible that they are able to see payment amounts, even if we're not able to see them in the reports we receive.  Thus, they would see whether you pay in full or not.

Valued Contributor
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Registered: ‎04-06-2011
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Re: paying in full on credit report?

For FICO scoring purposes, I don't know paying in full is given any weight. FICO likes to see some utilization, that's why 1-9% on one card is what most of this forums members like.

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Established Contributor
Posts: 825
Registered: ‎12-28-2011
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Re: paying in full on credit report?

Ah ok thanks for the info!

Super Contributor
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Registered: ‎01-28-2010
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Re: paying in full on credit report?

I think there is at least one CC that likes to report your end of month balance ( HSBC maybe ? ) but your statement balance is what gets reported for most creditors, regardless of what day of the month it cuts on.
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Registered: ‎02-09-2013
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Re: paying in full on credit report?

So it's recommended to keep a small balance instead of paying full?

Pls correct me if I'm wrong, but I also read that if you have multiple revolving credit, it's better to have one card carry a balance and pay the rest in full.
Frequent Contributor
Posts: 471
Registered: ‎03-29-2011
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Re: paying in full on credit report?

You aren't "keeping a small balance", just letting a small amount report on one statement. You can PIF after the statement cuts. There is no reason to pay interest to increase a FICO score.  The amount that reports should be between 1-9% of your credit line.

 

Best FICO scores tend to occur with only one card reporting a balance, and the other two or more cards reporting a zero balance. Its okay to use the other cards just PIF before the statement cuts.

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