Frequent Contributor
Posts: 405
Registered: ‎02-06-2009
Re: Newbie Question......

I think there's some confusion in this thread, so let me try to clarify with a couple of points.

  • You ALWAYS want to make a payment BEFORE the Payment Due date. This payment should be AT LEAST the Minimum Payment Due.
  • If you don't pay the full Statement Balance before the Payment Due date, you will be charged interest. (in most cases)
  • The balance on your account on the Statement Date is what gets reported to the credit reporting agencies EQ, TU and EX. (in most cases)
  • Best Practice: To maximize your credit score, let all your cards report zero balance EXCEPT ONE. For the one card that reports a non-zero balance, let balance reflect 1% of the credit line for that card.

Let's use a real example... the first statement for my brand new Chase Amazon rewards card Heart


Credit Line: $5000

Statement Date: 11/9/2012

New Balance: $378.08

Minimum Payment: $25.00

Payment Due Date: 12/6/2012


From this we can calculate 378/5000 = 7.56% utilization. This will get reported to the credit agencies.


I've made additional charges of $208.32 since the 11/9/2012 statement date. So my up-to-today balance is 378.08 + 208.32 = $586.04

(For the purpose of this example, let's assume that's all the additional charges I incur from now till the next statement date. In reality, you should keep track and recalculate just before you make a payment, taking into account any future charges you may make before the next statement date.)


What are my payment options?

  1. Pay nothing. I will get hit with a 30-day late derogatory that will stay on my CR for 7 years! Plus, I incur interest.
  2. Pay the $25 minimum due. I won't get hit with a late derogatory but I'll have to pay interest.
  3. Pay the $378.08 statement balance. I won't get a late derogatory and I won't pay interest. The balance on my next statement (estimated 12/9/2012) will be $208.32. Calculate 208/5000 = 4.16% utilization. Not bad, but we can do better!
  4. Pay such that only $50 balance appears on the next statement. Why $50? Because that's 1% of the 5000 credit limit. Calculate the payment 586.04 - 50 = $536.04.
  5. Pay everything I owe which is $586.04. This results in zero balance on the next statement. And thus 0% utilization.

In the eyes of a credit agency

  1. Get hit with a 30-day late on your report. Higher utilization reported.
  2. No late derogatory but higher utilization reported.
  3. Lower utilization reported but not optimal utilization.
  4. 1% utilization reported.
  5. 0% utilization reported.

BEST PRACTICE: Do #5 for all cards except one. For that one card, do #4.


Does that make sense?





04/13/2016 - EX 796 (American Express EX FICO® Score 8, range 300-850)
05/20/2016 - TU 811 (Discover TU FICO® Score 8, range 300-850)
04/26/2016 - EQ 782 (Citi EQ FICO® Bankcard Score 8, range 250-900)
GOAL - 800! - App free since 12/13/2015