topic Re: How does one pay cc bal in full each month to prevent it from showing up on credit report? in Credit Cards

How does one pay cc bal in full each month to prevent it from showing up on credit report?

rosa29617 — Sat, 30 Jan 2010 03:53:31 GMT

I just received a new cc card(unsecured) from my bank. I opened this new account because I want to raise my credit score and because I had no revolving credit. Anyway, after reading many of the posts here I'm hearing a lot about paying off full bal each month. So, my question is when should I make the payments; a few days before the statement comes out (which I do not know when), or soon after I receive the statement??? Help me out here.

Re: How does one pay cc bal in full each month to prevent it from showing up on credit report?

Jazzzy — Sat, 30 Jan 2010 04:38:45 GMT

What's important is that you try to pay the statement balance each month. When you pay it is up to you.

If you want to maximize your FICO score, the way to do that would be to go online and pay your balance 2-3 days before your statement will cut. You may have to call your credit card company to find out your statement date. Some of my cards have the same statement date each month, and some vary by a day or two.

Congratulations on your new card!

Re: How does one pay cc bal in full each month to prevent it from showing up on credit report?

Cotton_Britches — Sat, 30 Jan 2010 05:27:47 GMT

Why not pay it as soon as the bill comes?

Re: How does one pay cc bal in full each month to prevent it from showing up on credit report?

Anonymous — Sat, 30 Jan 2010 05:51:29 GMT

Because that woud not stop it from reportinga balance.

Re: How does one pay cc bal in full each month to prevent it from showing up on credit report?

Jazzzy — Sat, 30 Jan 2010 16:01:12 GMT

@missypants wrote:
Why not pay it as soon as the bill comes?

Hi missypants...

Most people do wait until their statement comes and then pay in full. If trying to maximize FICO, however, that doesn't work well.

Even if you pay in full when you get the statement, it is the statement balance that is reported to the credit bureau. So, for example, if I had a $5k credit limit card, and I charged $4.5k on it this month, and I pay it off when I get the bill, that's all OK. The problem is that $4.5k debt on a $5k card is a 90% utilization rate...and that's what my FICO score would be based on because the $4.5k was reported to the credit bureau.

My husband and I found that out when we applied for a mortgage on an investment property. We put on the app that we had no credit card debt. Then we got the call from the loan officer asking about the $6k in credit card debt that showed on our reports. We had paid it off when we got the statement, but it still showed and was counted in our FICO.

Many people pay before the statement cuts only when they are trying to tweak their scores for a mortgage, car loan, etc. But...remember...it takes an entire reporting cycle to change that reporting, so...for us...it's easier to just do it out of habit.

Re: How does one pay cc bal in full each month to prevent it from showing up on credit report?

DI — Sat, 30 Jan 2010 16:24:15 GMT

@rosa29617 wrote:
I just received a new cc card(unsecured) from my bank. I opened this new account because I want to raise my credit score and because I had no revolving credit. Anyway, after reading many of the posts here I'm hearing a lot about paying off full bal each month. So, my question is when should I make the payments; a few days before the statement comes out (which I do not know when), or soon after I receive the statement??? Help me out here.

Congratulations on receipt of your new card. To prevent a balance from showing on your credit reports, you want to PIF before the due date. When PIF prior to the due date, you do not want to use the card again until after the statement generates.

Re: How does one pay cc bal in full each month to prevent it from showing up on credit report?

Anonymous — Sat, 30 Jan 2010 16:50:07 GMT

You have to know what day of month they report to credit bureaus. Post the bank and someone here can tell you.

You need to pay online to play this game well. In addition to making your normal payment. You should pay the current balance online a few days before report date, and don't charge anything until after the report date. Then you can hit zero balance.

You only need to play this game if you are planning to apply for credit or credit increase soon.

From what I have read, and only having 1 account. I think having a balance of less than 10% utilization would give you almost the same score as zero balance.

Message Edited by Wolf3 on 01-30-2010 08:50 AM

Re: How does one pay cc bal in full each month to prevent it from showing up on credit report?

rosa29617 — Sat, 30 Jan 2010 21:49:42 GMT

Okay wolf3, I understand that part; so how do lenders view a zero balance? For instance, If my report shows a zero bal at the time I apply for new credit, how will the new lender know that I pay on time. Doesn't a zero bal appear as if I never used the card? Again, if I pay or have paid my cc bal in full each month for maybe six month, then apply for new credit, how will a lender know I made payments on time if there is a zero bal?

Re: How does one pay cc bal in full each month to prevent it from showing up on credit report?

rosa29617 — Sat, 30 Jan 2010 21:53:24 GMT

I am very prepared to play the game because I want to raise my score, so will the bank tell me what day they report to the bureaus? Is that free info.?

Re: How does one pay cc bal in full each month to prevent it from showing up on credit report?

haulingthescoreup — Sat, 30 Jan 2010 21:54:39 GMT

rosa29617 wrote:

Okay wolf3, I understand that part; so how do lenders view a zero balance? For instance, If my report shows a zero bal at the time I apply for new credit, how will the new lender know that I pay on time. Doesn't a zero bal appear as if I never used the card? Again, if I pay or have paid my cc bal in full each month for maybe six month, then apply for new credit, how will a lender know I made payments on time if there is a zero bal?

Good questions!

The fact that you have used your cards during the month does show on the full report pulled by lenders when you apply, even though you have a string of $0 balances.

I've been doing this for several years now, and at the times that I've applied since then, I've gotten nice comments from the lender CSR's.

They won't make interest money off of me, but they will make money in transaction fees when I use the cards.

Re: How does one pay cc bal in full each month to prevent it from showing up on credit report?

haulingthescoreup — Sat, 30 Jan 2010 21:57:43 GMT

rosa29617 wrote:
I am very prepared to play the game because I want to raise my score, so will the bank tell me what day they report to the bureaus? Is that free info.?

Yes, but they're nearly always incorrect.

What you can find out from them is what date your statement(s) will fall on. Almost every card reports the statement balance on the date that the statement posts, so once you know when the statement is due, stop using your card about 5 days before, pay online 2-3 days before, and check for any late charges to sneak in, and pay them too.

Exceptions: HSBC and Orchard bank cards, along with US Bank cards, seem to report the statement balance as of the last business day of the month. There are some that vary, but I think that any new cards that you are getting will follow this pattern.

Re: How does one pay cc bal in full each month to prevent it from showing up on credit report?

rosa29617 — Sat, 30 Jan 2010 22:02:02 GMT

I bank with a small local credit union, which I have a really good relationship with (been with for eight years total); the cc issue date was Jan 26., so how can I figure payment (date} will be due? Oh! I have not used it, and I doubt if I will use it much.

Re: How does one pay cc bal in full each month to prevent it from showing up on credit report?

haulingthescoreup — Sat, 30 Jan 2010 22:04:49 GMT

Well, your statement date might or might not wind up being around the 26th of each month.

I'd call them though, and ask when your statements will be generated.

With small local banks and CU's, you might just have to wait and figure out what their pattern is.

Re: How does one pay cc bal in full each month to prevent it from showing up on credit report?

Anonymous — Sat, 30 Jan 2010 23:53:32 GMT

Credit reports show

Credit Limit

High Balance

Monthly Payment

Recent Payment

Recent Balance

If you using the card, the recent and monthly payments will not be zero. So this will show you are actively using the card.

Re: How does one pay cc bal in full each month to prevent it from showing up on credit report?

rosa29617 — Sun, 31 Jan 2010 13:59:00 GMT

Got it!!1

Re: How does one pay cc bal in full each month to prevent it from showing up on credit report?

rosa29617 — Mon, 01 Feb 2010 16:15:52 GMT

I called my bank to find out when the statement will be cut for my new cc; the rep did not have that info. but said I can contact the cc distributor(VISA)directly to ask them. She had a number for me but I refused because I'm not sure I should call.Does this sound right?

Re: How does one pay cc bal in full each month to prevent it from showing up on credit report?

Anonymous — Mon, 01 Feb 2010 16:51:54 GMT

Yes - go ahead and call them if you're comfortable and wanting to do that.

Another option: when I have a new card, I use it and pay it off online immediately after it posts. Then I sit back and watch. Next month, you'll have all your ducks in a row.

Good luck & congrats on your willingness to be a PIF'er!

Re: How does one pay cc bal in full each month to prevent it from showing up on credit report?

rosa29617 — Tue, 02 Feb 2010 14:22:35 GMT

Great news! I just logged onto my bank's website and found that with the online banking, I can schedule payment dates which allows me to transfer funds from one account to another. Now all I have to do is determine what date to schedule a cc payment, which shouldn't be difficult; since I just got the cc and have no reason to use it, I may just wait for the first statement to get an idea when monthly statements will be cut. I hope this is a good decision NO USE, NO BAL right???

Re: How does one pay cc bal in full each month to prevent it from showing up on credit report?

Anonymous — Tue, 02 Feb 2010 15:42:04 GMT

Why not only charge 9% of your CL a month and then PIF when it posts, that way your util is never high?

Re: How does one pay cc bal in full each month to prevent it from showing up on credit report?

newstart2010 — Tue, 02 Feb 2010 16:06:51 GMT

No use does equal no balance, but beware. your card can be closed for inactivity depending on your bank. you want to use it every so often. And some places like seeing that you have used it wisely, maybe even all of the credit limit, but have paid it off completely when doing so. Basically lenders jsut want to see that you know what you are doing with your cards. So find out what the reporting date is for your bank, and then make sure you pay that off each month. Other than that, use the card all the way to the limit if you like. That is what its there for.

A friend of ours has that online payment. When she gets her bills she pays using the credit card, then goes online and pays off the balance immediately. She does this every few days, making sure that the card is always paid off completely, but used heavily.