How to Pay New CCs - Immediately or Wait for Statement?

[Anonymous]

DH an I received new CCs from Cap1. We both received a QS and a Platinum card (with $300 CL for DH and $500 CL for me). I wanted to get activity started right away so that I could work with the utilization and show Cap 1 usage and payment history, so I put a few small charges on each of them. Here is my question, when is the best time to pay them off? Should I go ahead and pay them off right now, or wait for my first statement to generate?

For better reference, my goal is to improve credit scores and be able to refinance a newly purchased vehicle in a year, and probably purchase an additional vehicle.

[takeshi74]

For scoring purposes the standard advice applies.  Keep reported utilization under 30% but lower is better as long as you're not allowing all zeros to report.

It's your call where you want your reported utilization to end up.  Optimal is having only one balance at 10% or less but that's really only suggested when one is applying for new credit and looking to eke out every possible point.  There's no need to do this every month though there are those that choose do so anyway.

There isn't a universal best for when to pay and you need to consider your specific situation, priorities, goals, etc to determine what's specifically best for you.  My spend and limits, for example, end up well under 10% as it is so I don't worry over this myself.  I just pay by the due date.  However, if you want to reduce your reported balances then you'd need to pay your balances down prior to report date.  With limits like those it can be difficult to keep extremely low reported utilization.

Even if high utilization reports one month it's really no big deal and you can adjust the reported utilization on the next cycle.  Your scores will reflect whatever your current utilization is when the scores are generated.

While utilization is a significant scoring and risk factor it's not the only one so don't overlook the rest of your credit profile.  Is you payment history squeaky clean and free of derogs?r

[Anonymous]

Our plan for the credit cards is to use them where we would normally use our debit card, then pay the card off or down low before the due date. I guess I'm not asking the right question. Because we just got the cards and they aren't being recorded yet at the CRAs, do we want to pay them off now, or wait until our statement is billed? Will it make a difference, or only make a difference as far as utilization because it will show a limit and a balance? Do we need to wait for our statement so that we know when it will be reported to the CRAs and get an idea of how the billing cycle works?

No, our credit history is not clear and free of derogs.

We have a BK from 2008, student loans and a personal/consumer loan from Springleaf Financial and I have some medical collection accounts.

[Anonymous]

Heavy use the cap1 tends to give you more room. You need higher limits and time to get the scores up, and for other banks to like you in the future. You can't control time, so work on the QS relationship. Let it report balances, its all 0 percent anyway? Reporting isn't carrying a balance, don't get the wrong idea however

[Anonymous]

Statement here. It helps if you have a long established credit profile with no negatives.