I buy things on credit card, and pay the full amount off, but my credit score is going down instead of up?
I have nothing else my name expect this credit card, and student loans that are not due yet because I am still in college.
I buy things on credit card, and pay the full amount off, but my credit score is going down instead of up?
I have nothing else my name expect this credit card, and student loans that are not due yet because I am still in college.
no, you pay the statement balance each month not the current balance. the statement balance is the amount that's due from the previous month. the current balance includes the present month's spending. if you pay the current balance before its statement generates, you'll lower your utilization but doing this across all your cards lowers your score because this shit is intentionally confusing and meant to fuck you over.
I'm really struggling w this. Are you suggesting the above so that one's credit utilization is above zero (I've run into one cnbc article that suggests to do this; all articles I've read have suggested to keep the utilization rate less than 30 or even 10 pct; but the one cnbc article says the same, but also to keep it over 0 pct).
Again, I'm dumb and don't understand how I would do this, even as you just explained it. I've been paying off my credit card as soon as I use it. I never use any more than five or ten pct of available credit line at a time, and, again, I always pay it back immediately. I use the CC very frequently, and pay it off a few times a month. How should I better schedule payments, so as to have my ratio be between zero and ten(rather than just zero, as I guess it must be now? (for example: let's say my billing date is the first of each month. Let's say all my balances are zero going into July, and that my credit limit is 10000. And let's say in July, I spend 1000 on my CC. When and how should I pay this back?)
(Appreciate you humoring me if you have the time to; apologies if I've missed your point)
I guess I'm struggling between statement balance and current balance, and the timing requirements related thereof.
yep, precisely. a 0 credit utilization is penalized so you want at least one card to report a small balance when the statement generates. every other card should have its current balance (which includes the statement balance + the balance that has not yet been included on any statement yet) paid. you only need to do this in the month before you apply for credit as utilization has no memory.
the due date for each card is about 5 days before the next statement generates. so on the due date you want to make sure you bare minimum pay the statement balance. to optimize utilization you'd pay the total current balance instead. let's say in May, I spent $50 dollars. that generated a statement on June 6th saying I owe $50 dollars. then in June I spent another $50 dollars. on July 1st, the May statement balance is due but there's also the balance from June on the card. this balance is not yet reporting on a statement so it hasn't been sent to the credit agencies yet. let's say my credit limit is $100. this means that if I pay the statement balance from May in full, my utilization on July 6th will be 50/100=50%. however, if I pay $100 instead, my utilization will be zero. if this is my only card, I might choose to pay $99 instead so that it reports 1% instead of 0% (in reality you want to aim for more like 5% - the zero balance penalty starts to apply under some threshold near 5% but we don't know what it is).
hope that helps! this shit is confusing on purpose so that you fuck it up and wind up paying penalties or hurting your credit score.