optimizing credit score on my small limit card. Should I pay off my card before the statement ?

[Anonymous]

I now have my pathetic 300 limit cap1 qs1 card.  Here's my questions about best way to improve score.

1. Run up-- I read don't run past 38% of your limit. Is that true with such a low limit?

2. Payoff monthly-should I pay to zero, or, leave at 8 or 9%, in this case like $20 to rollover to next statement ?

3. Is it bad to make payments with 3wks to go in cycle?

4. If I pay it off now, will my limit go back up before statement gets printed?

5. Is there a benefit to letting the charges sit there at least until I get the statement, or is it better to quickly pay?

Common sense would say its better to pay asap, but I know common sense is not always reality.

[Anonymous]

Here’s my take:

1 - spend as much as you want on the card but 3-4 days before the due date, pay it down to $5-6 and don’t use it until the next statement cuts.

2 - see above - you want to leave a small balance to report if this is your only card, as having a zero utilization report to the bureaus incurs a scoring penalty.

3 - not at all. With a $300 limit, any considerable use of the card will require several payments a month. This is fine.

4 - if you mean will the available balance to spend, yes. CapOne has always updated the next day for me, possibly two days if I paid on Saturday but I don’t recall specifically. In any case they do promptly credit your payments and free up available spending.

5 - if you wait for the statement, whatever balance you have will be what is reported. Pay down to a little over $5 and let that report, then pay it off as soon as the statement cuts. This will keep your no-interest grace period in play each month and you’ll never be charged interest.

[Anonymous]

Thanks !

[Anonymous]

This raises an interesting question. If I pay off my card several times during the month, does cap1 see that as bad or good?  In theory, I could charge 900 or more to an account that only has a 300 limit if I pay down each week as I use it. If it doesn't affect fico, would it affect cap one's internal credit raing view of me?

[800FICOGoal]

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@Anonymous wrote:

This raises an interesting question. If I pay off my card several times during the month, does cap1 see that as bad or good?  In theory, I could charge 900 or more to an account that only has a 300 limit if I pay down each week as I use it. If it doesn't affect fico, would it affect cap one's internal credit raing view of me?

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I'm leaning towards Cap1 seeing that as a positive. I had a $1,000 SL on my Secured platinum card, and I was paying multiple times per month. In December Cap1 gave me $300 CLI without me asking. So it seems they liked my pattern of spending and immediately paying .  Now I have this hybrid secured/unsecured credit card. 

[Anonymous]

This is a really good question, because it drills down to the specifics and I've been very curious about this as well. The answers you've gotten so far have been very helpful.

I have a Green Dot secured card (SL of $200) and I've read so many cautions here about keeping the balance down that I am constantly sending in payments. I don't know if I've ever had a balance above $50. I get antsy if it's above $20! Green Dot is different (because it never graduates and it isn't like Green Dot has any unsecured cards I can apply for) but whatever I'm doing, it hasn't hurt my FICO score. I've gone up 20 points in a less than three months. (Probably due to several factors, but I think the Green Dot's low balance helped.)

[800FICOGoal]

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@Anonymous wrote:

I've gone up 20 points in a less than three months. (Probably due to several factors, but I think the Green Dot's low balance helped.)

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Sounds like a combination of accounts aging and low utilization. 

[FireMedic1]

Short and sweet. Cap1 likes heavy usage and PIF. If it takes a few payments a billing cycle so be it. Dont blame the company. Least you got a unsecured card. Good Luck it will grow in time.