Please define the "balance" that affects credit score

[Anonymous]

Several messages explain how your credit card balance affects your credit score.

Please check my assumption that this "balance" is the amount you owe AFTER making your monthly payment.

So if you pay it all off, your "balance" is zero. It does NOT matter how much we spend and pay off within the same month.

[MidnightVoice]

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eucalypt wrote:
Several messages explain how your credit card balance affects your credit score.

Please check my assumption that this "balance" is the amount you owe AFTER making your monthly payment.

So if you pay it all off, your "balance" is zero. It does NOT matter how much we spend and pay off within the same month.

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It is the balance your CCC reports to the CRA, which is usually your statement balance.  This means that if you max out a card, then pay it off AFTER you receive the statement, you will NOT have a zero balance reporting to the CRA, but a maxed out card reporting.

I didn't understand this, which kept my scores in the toilet until I did two things - got two more cards so that the amount of my available credit I was using was lower, and started paying most of my CC bill online BEFORE the statement date.

[Anonymous]

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eucalypt wrote:
Several messages explain how your credit card balance affects your credit score.

Please check my assumption that this "balance" is the amount you owe AFTER making your monthly payment.

So if you pay it all off, your "balance" is zero. It does NOT matter how much we spend and pay off within the same month.

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If you pay it just before your card reporting date.  Lets say you have a 500 dollar card, you max it out. get the bill and pay it off immediately.  You bank will report your statement balance in ost cases appearing as if you carry maxed out cards. To use this trick schedule payment to arrive BEFORE the statement falls.

[Anonymous]

Thank you for the very helpful and surprising replies!

So "balance" means the opposite of what I had assumed. And to think that I hesitated to ask what I feared was a stupid question!

Your replies also help me understand this otherwise obscure statement"

"... even if you pay off your credit cards in full every month, your credit report may show a balance on those cards. The total balance on your last statement is generally the amount that will show in your credit report."

(from page 11 of http://www.myfico.com/Downloads/Files/myFICO_UYFS_Booklet.pdf )

[Anonymous]

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eucalypt wrote:

"... even if you pay off your credit cards in full every month, your credit report may show a balance on those cards. The total balance on your last statement is generally the amount that will show in your credit report."

(from page 11 of http://www.myfico.com/Downloads/Files/myFICO_UYFS_Booklet.pdf )
 

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Hey thats what I just said...LOL!!!

[Anonymous]

This is very true now that CCC's have moved to the 25 day cycle.

Where Due date is the 16th and the statement date is the 20th.


It has been challenging to teach my DW not to charge anything between these dates as it throws the UTL out of line.