Does advance repayment of credit card balance affect credit score, positively or negatively?

Question

In particular, I am evaluating the option of paying off the whole amount today, before my statement arrives (three weeks later). Is it better to wait for the statement at the end of the three weeks?

Answer 1

Positively.

Credit scores are directly affected by the ratio of your credit limit to the balances you maintain. As a rule, the lower the % that you owe the better the score. When credit card balances exceed 70% of the card limit...scores drop rather drastically...even though you have never made a late payment. The bureaus look at that as a credit risk.

As a lender, I run many credit reports and coach borrowers on how to maintain their best possible scores. The bureaus provide lenders tools that enable us to determine what items make the largest score improvements to a given file. It allows me to adjust and play with balances to see what has to be paid on what accounts to make what score improvements.....and it is generally very accurate. This can help a person get a better loan / rate than they qualify with the current score...and all this can happen over the course of 1 week. So if you are in the middle of financing, or about to be...paying off the consumer debt balances is a good thing...but knowing which items will make the biggest impact requires professional assistance.

Hope this helps.

Answer 2

Paying early rather than later, assuming you pay within your grace period, won't help at all. Paying off the whole balance won't help as much as you think, because scores are weighted by payment history. Unless you continue to use your credit and pay it off every month, paying it off once and leaving it alone with a zero balance doesn't help. The best thing you can do to improve your score is pay the balance down to 20% or less of the available credit every month.

Rick
www.priemlendingonline.com

Answer 3

Very positively. It's a good thing.

Were you thinking that the right way to handle a credit card balance is to pay the minimum each month? No. If you did that, it would take many years to pay off a substantial balance. (Details depend on interest rate and minimum payment rules.)

Truly responsible users of credit cards pay off the entire balance each month and never pay any interest. This gives excellent credit scores.

Answer 4

You should always pay it the day after your cycle ends, your statement says it. That way, you pay less from your daily percentage rate. Like, if you pay $50 the day after your cycle, and you have a 30% yearly rate, that $50 wont gain the interest of 1/12 of the 30% interest. 1/12 is because its the monthly bill, and you have to divide the 30% to figure out how much interest is chaged in 1 month. You save something between 1 and 2 dollars for each month you do that.

Answer 5

when you pay off your balance..it ups your credit a couple of points. it's not as great as people think it is. what creditor's look at is WHEN you pay and HOW you pay. every time that you are late with a payment you're apr goes UP!! a lot of people don't know that. i am a collector for aspire visa, tribute gold aspen and emerge. if you keep your bal. paid up your credit score will increase in a short time. pay early you'll save late fees. make them waive the check by phone fee if you call it in. good luck!

Answer 6

the only time your loss of use of a card could be risky on your credit is whilst the cardboard has been paid off and additionally you're no longer applying it. over the years that card could get flagged as inactive and which could injury your credit. you're actual approximately your debt-to-credit-shrink ratio and as long as you're making money on your card, it is going to likely be energetic and could be helping you enhance your credit by using lowering your debt. So shop making those well timed money and additionally you would be in stable shape very right now ;)

Answer 7

Positively. As long as you pay it off, you are affecting your credit score positively. Just try to pay it on time.

Answer 8

If you can pay off the card early, I recommend you do. I don't know if it appears on your credit report any different than a normal on time payment. I've never seen 'Paid Ahead' on my credit report.

Answer 9

Positively, but I don't think the sooner before the due date you pay it the more points you get. The more times you pay it on time, the better your score.

Answer 10

positively. it shows lenders that you repay your bills.