Ask Anderson 8.1.2020: Easy Hack for Improving Your Credit Score
When Do Your Credit Cards Report Payment History?
Want an easy way to ensure that your credit score increases (or at least remains the same) that’s not a well known “hack”? Call your card issuers and ask when your balance gets reported to the credit bureaus. While that is often the closing date, know that is can be a
different date from your “due date” on your statement.
Why this is important and how it works: “Credit utilization ratio.” Credit utilization ratio is the amount of credit you’ve used compared to the amount of credit you have available. This applies to your overall credit card use, as well as for each credit card. You want to keep a range of less than 30%. However, to boost your score even fast, keep that ratio to less than 10%. *remember, this is not only overall, but on each individual card
Here’s the important thing to know and always remember with credit cards: Even if you pay your balance off every month (and you should), if your payment is received after the reporting date, your reported balance could be high — and that negatively impacts your score because your ratio appears inflated.
Now you know an easy way to improve your credit score: pay your bill just before the closing date. Then, your reported balance will be low, possibly even zero, boosting your credit score.