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Paying balance in full is amazing for credit!

New Member

Paying balance in full is amazing for credit!

I recently paid off all my cards in full (5k) and continue to each month. Ever since i started doing this it has greatly improved my credit 

litteraly going from a 520 from experian to a 725 in less than 2 months!! I know paying in full may not be possible for everyone but if you can or save up to do so is worth it in the long run!

Starting Score EX 520 EQ 510 TU 550
Current TU 673 EQ 673 EX 725

Current Cards

Citi AAmerican Advantage Platinum WEMC $2,000
Capital One QS MC $750
U.S Bank Harley Visa $500
BoA Card MC $500
Credit One Visa $300
Indigo MC $300
Citi Secured MC $200 Discover IT secured $200 Deserve pro $500

Cards to come

Costo Visa
BBY Visa
AMEX EDP

CHASE AMAZON PRIME

Message 1 of 17
16 REPLIES
Frequent Contributor

Re: Paying balance in full is amazing for credit!

...even better is the lack of interest that you'll end up paying. It's amazing what that difference will make financially if you can PIF every card every month. 

 

MO Money for you!  Smiley Very Happy

Message 2 of 17
Super Contributor

Re: Paying balance in full is amazing for credit!

OP, can you describe for everyone what your utilization was when your score was low compared to what it is now after having paid down your revolving debt considerably?  It's always good to be able to compare a utilization (percentage wise) paydown to the score change seen from the paydown.

Message 3 of 17
New Member

Re: Paying balance in full is amazing for credit!

About 80% so pretty high before now I’m at an average of 8%
Starting Score EX 520 EQ 510 TU 550
Current TU 673 EQ 673 EX 725

Current Cards

Citi AAmerican Advantage Platinum WEMC $2,000
Capital One QS MC $750
U.S Bank Harley Visa $500
BoA Card MC $500
Credit One Visa $300
Indigo MC $300
Citi Secured MC $200 Discover IT secured $200 Deserve pro $500

Cards to come

Costo Visa
BBY Visa
AMEX EDP

CHASE AMAZON PRIME

Message 4 of 17
Community Leader
Super Contributor

Re: Paying balance in full is amazing for credit!

0 credit card debt is my goal. Awesome jobSmiley Happy
Message 5 of 17
Valued Contributor

Re: Paying balance in full is amazing for credit!


@Moneyklutz wrote:

...even better is the lack of interest that you'll end up paying. It's amazing what that difference will make financially if you can PIF every card every month. 

 

MO Money for you!  Smiley Very Happy


And yet so few people get that PIF is the smart thing to do. How do we convince the country that if they can't pay cash for something, they shouldn't be putting it on a card either?

Message 6 of 17
Established Contributor

Re: Paying balance in full is amazing for credit!


@AverageJoesCredit wrote:
0 credit card debt is my goal. Awesome jobSmiley Happy

Then why do you keep asking BoA for CLI's?  Smiley Wink JK lol

Message 7 of 17
Super Contributor

Re: Paying balance in full is amazing for credit!


@sternfan619About 80% so pretty high before now I’m at an average of 8%

Very nice.  That constitutes the crossing of 4 known tresholds, thus the significant gain.  Keep up the good work.

Message 8 of 17
Valued Contributor

Re: Paying balance in full is amazing for credit!


@iced wrote:

@Moneyklutz wrote:

...even better is the lack of interest that you'll end up paying. It's amazing what that difference will make financially if you can PIF every card every month. 

 

MO Money for you!  Smiley Very Happy


And yet so few people get that PIF is the smart thing to do. How do we convince the country that if they can't pay cash for something, they shouldn't be putting it on a card either?


Part of the problem is the urban myth that paying steady payments over time proves credit worthiness.

I admit, I believed that very thing until a few years ago.

I had a CC made a large charge and could have paid it off- instead like a dope, I payed decent sized payments over time..

Sadly, I think many people believe the same..Smiley Sad

Message 9 of 17
Super Contributor

Re: Paying balance in full is amazing for credit!


@Pikaboo-icu

Part of the problem is the urban myth that paying steady payments over time proves credit worthiness.

I admit, I believed that very thing until a few years ago.

I had a CC made a large charge and could have paid it off- instead like a dope, I payed decent sized payments over time..

Sadly, I think many people believe the same..Smiley Sad


I suppose it depends on what you mean by "proves credit worthiness" and also what constitutes "steady payments."

 

If you mean "improves score" I would tend to agree with you.  There's no [scoring/credit] benefit in the long term if you have a CC with a $1000 balance that you pay off with a single $1000 payment today, or if you just make minimum payments on it for 5 years and finally pay it off.  5 years from now one won't have a higher score or exhibit any superior credit worthiness if they made 60 payments verses 1.

 

If someone is making "steady payments" simply from being a Transactor and paying in full every month, that may be considered exhibiting or proving superior credit worthiness over time.  Upon a MR or if trended data is looked at, someone that is using a CC every month and always paying it off for a period of 5 years is going to look "better" than basically any other scenario... be it carrying a balance, not using the card at all, using the card once every 12 months, etc.   

Message 10 of 17