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Question regarding structuring CC payment to maximize credit score

wayni208
Valued Member

Question regarding structuring CC payment to maximize credit score

Been lurking for a few weeks now and let me first thank you guys for the information you share. 

 

My my scenario is this:

 

Cap1 QS card with $500 limit. 

 

My last statement on 2/15 was for $84 dollars total, min payment $25. Due date 12th of each month. Statement date is on the 15th of each month.

 

Since my last statement on 2/15 I ran my balance up to $445. I paid the balance in full yesterday, 3/10 and am now at 0. 

 

My understanding is that when it reports next it will be 0 and 0 utilization. Do I want to use it and incur a balance of more than zero and less than 10% to maximize my credit score? Should I be doing this differently?

 

Also - say I simply paid the $84, left the remainder on. I understand that my utilization would be high for the statement and reporting due on 3/15. But am I correct in thinking that I will not incur any interest unless any portion of that balance carries over after the 4/15 statement? 

 

Thanks for reading and and thanks for responding as well. 

 

 

Message 1 of 7
6 REPLIES 6
WaveRider
Established Contributor

Re: Question regarding structuring CC payment to maximize credit score

Either let it report at $0 or less than 9%.  With one card not sure which would be better, I'm sure some other people can help.

Message 2 of 7
wayni208
Valued Member

Re: Question regarding structuring CC payment to maximize credit score

I do have more than one card. 2 Cap1 QS with $500 limits (1 primary, 1 AU), 1 CreditOne with $600 limit, 1 Discover IT with $1000 limit. 

 

I have used used the same strategy with each. Each are sitting between 1-9% util now. 

 

My goal is to move to Chase UR cards, Freedom and CSP,  after a bit more history - AAoU  currently 6 months but will soon drop to 4 to reflect the Discover card which I just got. 

Message 3 of 7
newhis
Valued Contributor

Re: Question regarding structuring CC payment to maximize credit score

The general rule for max score is:

- let 1 card report a small balance, it could be $10, the others $0.

 

I haven't done that in a long time because my score is in the very good area. So I will only do this a couple of months before a big app if I need the extra points. Some people do this every single month.

 

You are correct, if statement 2/15 your reported balance was $84, then you used your card and now your balance is $445, you only need to pay $84 and pay the balance for 3/15 by 4/10 in full to not generate interest. I think if you don't pay the full 3/15 balance by 4/15 and you carry some of it, then you card will lose the 'grace period' and your purchases will generate interest, so even if you pay in full by 5/10 your 4/15 balance, you may end with some interest generated on 5/15. Once you pay in full again your 5/15 balance by 6/10 then no more interests will be charged until you fail to PIF again. I hope this is clear.

 

EDIT: Once you have more history, at least 1 year with your oldest card and you get an offer for CSP on Chase pre-qual site, then go for it. Minimum limit is 5K. Once you have more cards at 5K then apply for Freedom. Chase may give you Freedom with low SL as your first Chase card. If you start with CSP and you wait to app for next Chase card, you may get the next Chase card with 5K or even more.

Message 4 of 7
NRB525
Super Contributor

Re: Question regarding structuring CC payment to maximize credit score

newhis has the payment timing right, however with Capital One my experience has been that getting back to no interest charges is easier and quicker than with other banks.

 

If I pay the balance to zero, on a CapOne card that is generating interest cost on the prior statement, I get that latest statement with no interest cost, meaning you could pay it down to zero and stop the interest charges within the same month.

 

The January 2017 Venture statement was one statement on one of my two cards DID charge interest on the last month, but the Quicksilver in February 2017 finished up with no interest on the last month. I will be continuing to experiment with this and hoping January was an outlier.

High Bal Jan 2009 $116k on $146k limits 80% Util.
Oct 2014 $46k on $127k 36% util EQ 722 TU 727 EX 727
April 2018 $18k on $344k 5% util EQ 806 TU 810 EX 812
Jan 2019 $7.6k on $360k EQ 832 TU 839 EX 831
March 2021 $33k on $312k EQ 796 TU 798 EX 801
May 2021 Paid all Installments and Mortgages, one new Mortgage EQ 761 TY 774 EX 777
Message 5 of 7
newhis
Valued Contributor

Re: Question regarding structuring CC payment to maximize credit score

Hey NRB525, good info, thanks.

 

I see some differences between lenders. Some will start charging interest if you use the same card that has a BT, others like Cap1, will tell you the amount you need to pay each month to avoid interest (basically your purchases plus some of the BT).

 

So it is great to know that Cap1 will return to 'no interest' mode before others.

Message 6 of 7
wayni208
Valued Member

Re: Question regarding structuring CC payment to maximize credit score

Thanks for the info 

Message 7 of 7
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