When to Pay Your Credit Cards for Optimum Credit Scoring
Let’s say you’re a contractor and you have a $20,000 line of credit from a credit card, backed by VISA or Master Card. Every month, you buy supplies for your business and you charge up to, or around, the maximum – $20,000. You receive the bill and pay it off in total within three days, which is before the due date. The next month you do the same: Charge all your supplies, roughly totaling $20,000 and pay it off in total after receiving the bill.
What is being reported to the bureaus?
The creditors report your billed amount, in this case, $20,000, to Experian, Equifax and/or Trans Union. Your Credit Utilization is close to or at 100 percent. If you had FICO scores over 800, your score could go down by over 100 points!
Is there a way to fix this so you can have a much better, higher score and still conduct business the way you have been?
Good NEWS!!! Yes you can.
Go on-line and pay it one week early. Then the bill you receive will have a reduced balance and thus a higher score due to improved credit card ratios.
If you don’t know the rules, you can’t play the game.