Photo: Flickr / keso
A recent post on Quora set our tongues wagging over whether timing your credit card payments will really improve your score.”Is it better to pre-pay some/all of one’s credit card balance, or should one wait for the monthly statement before paying it in full?” the reader asked.
Here’s our response:
It’s a simple question with a complicated answer, said Bethy Hardeman, expert with CreditKarma. First, “you’ve got to know the date that your statement is generated is not necessarily the date that your credit card company reports your balances to the credit bureau.” You should also do these two things to get a better idea of where you stand:
1. Ask your credit card company when your balance is being reported, which they may or may not be willing to disclose. “It’s still worth it to ask,” said Hardeman.
2. Or check your credit score regularly so you can pinpoint the day your score changes. “Mark that date as your credit card reporting date,” Hardeman said, then plan to pay your bills before then.
The surest way to bolster your score is to keep your credit card balance low (i.e., 30 per cent of your credit limit). Though it may take a lifestyle adjustment for the credit-dependent reading this, the payoff will help you finance the life of your dreams—and stay out of debt.