While surfing the net i read this on AOL finance. sorry its kinda long. So you pay your credit cards in full each month. That's great, but as far as your credit report is concerned, you're still in debt. Why? Each month creditors report to the bureaus your latest statement balance -- i.e. what you rack up each month before you pay your bill in full, explains Watts. That dollar amount will appear on your credit reports and will be picked up by the FICO formulas. So if, for example, the balance on your latest statement was $2,000 and you sent the credit card company a $2,000 check, your credit report will show you had a $2,000 balance for that month, not $0. A smart way around that: Pay your card bills before the next statement date. That's typically mentioned on top of the bill, right alongside your due date. Because of the grace period creditors give -- usually 20 to 25 days -- your statement date is typically 20 to 25 days before your actual due date. (You can find out when your next statement date is by logging onto your credit card account online or calling your creditor.) Once you know your statement date, pay off the full balance a day or so in advance. The result: The creditor will report $0 to the bureaus, bringing your credit utilization as low as possible and improving your score.
