When's the best time to pay credit card bill? (for your score)

Discuss the Visa & MasterCard payment networks as well as cards that operate through them.
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38mgera
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When's the best time to pay credit card bill? (for your score)

Postby 38mgera » Sat Mar 10, 2012 10:03 am

I have Wells Fargo 1% reward credit card. I am always pay all my balance and never late. I am wondering, does it make difference on my score when I pay my balance (before due date of course)?

Also, I would like to know is it good idea to pay ahead so not to have balance anytime?

My credit limit is $1500, what percentage of it is better to use every month for best score increase.

My main problem is to increase my score quickest way, as I am new in US and my credit history is about 1 year old. And finally, how can I securely check my credit score (not report, I know how to do it)? I want to see whether I am eligible for mortgage or no.

I would appreciate if you give me any help, links.


Celestine
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Postby Celestine » Sat Mar 10, 2012 8:58 pm

38mgera wrote:I have Wells Fargo 1% reward credit card. I am always pay all my balance and never late. I am wondering, does it make difference on my score when I pay my balance (before due date of course)?

Also, I would like to know is it good idea to pay ahead so not to have balance anytime?

My credit limit is $1500, what percentage of it is better to use every month for best score increase.

My main problem is to increase my score quickest way, as I am new in US and my credit history is about 1 year old. And finally, how can I securely check my credit score (not report, I know how to do it)? I want to see whether I am eligible for mortgage or no.

I would appreciate if you give me any help, links.


There is no such thing as "quickest way" to increase credit score. It takes time.

Pay your balance after you receive your statement. You are already doing that so it is all good.

Paying your balance even if the billing cycle is not closed yet won't increase your remaining credit. Your remaining credit for a particular month will only increase or go back to your credit limit once the billing cycle is already closed.

Ideally or in theory, credit utilization of each card should be 30%. So the 30% of your $1,500.00 is around $450.00. You can only spend $450.00 worth of purchases each month on that $1,500.00. BUT that is only in theory. I personally have been going over that 30% credit utilization on each card that I have BUT I pay those balances on time. So far my credit score has been in the 720-750.

If you have yet to check your credit score and history this year 2012, then you are eligible for the free credit report. The official website is AnnualCreditReport.com

Here are the legitimate website to check your credit score:
For mortgage, credit score is used mainly for the APR. If you have alot of money in the bank (regardless if you are new to the US) or earns and saved alot in the past year(s), then your credit score will mostly determine the APR of your mortgage.
"Nearly all men can handle adversity, but if you really want to test a man's character - give him power." - Abraham Lincoln

namvet
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Postby namvet » Sun Mar 11, 2012 11:14 am

+1 Great advice from Celestine.

2percentPlus
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Postby 2percentPlus » Sun Mar 11, 2012 2:16 pm

Celestine wrote:Paying your balance even if the billing cycle is not closed yet won't increase your remaining credit. Your remaining credit for a particular month will only increase or go back to your credit limit once the billing cycle is already closed.


Sorry, but that is not correct. I pay off my balance multiple times per month and have increased available credit as soon as the payment is posted. If not for this, my credit limit would need to be about 2-4x higher.

Celestine
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Postby Celestine » Sun Mar 11, 2012 2:41 pm

2percentPlus wrote:Sorry, but that is not correct. I pay off my balance multiple times per month and have increased available credit as soon as the payment is posted. If not for this, my credit limit would need to be about 2-4x higher.


That is based on all the credit cards that I have. Have been paying early before the bill cycle closing date but the remaining credit still stays the same. Example, if my credit card's credit limit is $4,000.00 and I used up $1,000.00. Even if I paid that $1,000.00 before the billing cycle closes, my remaining credit stays at $3,000.00; it does not go back $4,000.00. It only goes back to $4,000.00 on the new billing cycle provided I pay the amount due of $1,000.00 on or before the due date.

So now I wait for those billing cycles to close and receive my billing statements before I make payments. That is one reason why I have multiple credit cards and a charge card.
"Nearly all men can handle adversity, but if you really want to test a man's character - give him power." - Abraham Lincoln

2percentPlus
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Postby 2percentPlus » Sun Mar 11, 2012 7:58 pm

That makes no sense, all my cards increase available credit with a payment made, if they didn't there's no way I could use them because I can spend the credit limit in 2 days, so I'm not waiting another 28 days to use the card again.

They do not increase the available credit over the credit limit if you account is negative.

38mgera
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Postby 38mgera » Sun Mar 11, 2012 10:27 pm

Thank you, Celestine.

What about if I call to Wells Fargo requesting about increase of my CL? Can it hurt my score? I use around 700-900/month from credit card. So, I guess if they increase it to about $2500 then 30% will be approx equal to my spending. And, I think that in that case score will increase more quickly.

Usually, how long it takes that credit companies automatically increase CL?

Can you give estimate, how much will become my score, in a year after starting credit history, without doing any late payment on CC on any other utility bills, apartment rent bill. As I know they are connected to credit history, aren't they?

FutureBillionaire
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Postby FutureBillionaire » Mon Mar 12, 2012 12:41 pm

2percent is correct. Pay down or pay off your credit card balances BEFORE your statement closes so that your issuer reports lower utilization to the credit bureaus.
Gas: Discover It, Penfed Platinum Rewards x2, Chase freedom, Citi TYP
Plane tickets: CSP
Groceries: AMEX BCP, Penfed Platinum Rewards,Citi TYP
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Amazon: Citi Forward, Cash +
Restaurants: Citi Forward, Chase Freedom, Discover IT, CSP
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Movies: BofA travel rewards visa signature(fandango), Discover IT, Citi Forward, Freedom
Bars, clubs, tomfoolery: CSP, Citi Forward, Discover IT, Freedom
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Everyday spending: Bofa Accelerated cash rewards amex, Discover Escape

mookie
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Postby mookie » Mon Mar 12, 2012 11:59 pm

Celestine wrote:Paying your balance even if the billing cycle is not closed yet won't increase your remaining credit. Your remaining credit for a particular month will only increase or go back to your credit limit once the billing cycle is already closed.


I agree with 2percentPlus that this wrong. With my Amex and Chase cards the available credit increases if there are any payments or credits to the account.

Celestine
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Postby Celestine » Tue Mar 13, 2012 6:04 pm

38mgera wrote:Thank you, Celestine.

What about if I call to Wells Fargo requesting about increase of my CL? Can it hurt my score? I use around 700-900/month from credit card. So, I guess if they increase it to about $2500 then 30% will be approx equal to my spending. And, I think that in that case score will increase more quickly.

Usually, how long it takes that credit companies automatically increase CL?

Can you give estimate, how much will become my score, in a year after starting credit history, without doing any late payment on CC on any other utility bills, apartment rent bill. As I know they are connected to credit history, aren't they?


Not 100% sure but increasing CL will only do soft credit pull that does not adversely affect your credit score.

Based on my past experience, it varies to whomever the supervisor you speak with. Some are stingy to increase credit limits but some do increase credit limit upon request. But my bank automatically increased my credit limit after two years or so of opening my account.

My credit scores jumped +30 to +40 points after a year; have been paying all my bills on time and no late or missed payments. Again, this is based on my experience.

Yes, missed or late payments are reported to your credit history as delinquent.
"Nearly all men can handle adversity, but if you really want to test a man's character - give him power." - Abraham Lincoln



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