does it improve your credit score to pay off all your credit card bills every month?

Question

I ask this because i was told to keep my balance aroujnd 1-9% utilization. So what gives?

Answer 1

Yes, it helps a LOT. I checked out my credit report on myfico.com and they had "simulations"....one of the hypothetical situations I put in was paying off my credit card bills. Even paying off my one credit card ($700) raises my credit score from 609 to 700-something.

Answer 2

A big part of your credit score is the ratio of debt to available limit. You should never use more than 30% of your available credit limit. Paying credit cards in full, keeps that debt percentage low. Plus you don't pay interest and don't sink into debt.

Some have the mistaken idea that carrying a balance and making small payments is better for your score. Credit card companies do not report how much you paid. They only report if it was on time or late.

Answer 3

Stop paying the card immediately after the purchase. Credit cards only update to the credit bureaus once a month. It is likely that you won't show any utilization when that update happens. You need to show utilization to build your credit. You are also losing out on one of the benefits of using a credit card -- the interest free grace period between the purchase date and the statement due date when you pay the balance in full each month. Besides, credit cards do not like it when you make multiple payments each month and may freeze your online access after a certain number of payments. Make things easy. Use the card for regular purchase, WAIT FOR THE STATEMENT, and pay the statement balance in full every month. This will build your credit and avoid interest.

Answer 4

I pay off any credit debt when it is do in thirty days. Normally I use a debit card to pay day to day things. My credit score is over 800 so I guess it works.

Answer 5

If you don't pay off your credit cards every month, your credit rating goes in the tank.

Answer 6

I would encourage you to get rid of those credit cards and use your money to buy what you need. You don't need a high credit score if you purchase everything with your own money. Cars, vacations, rentals, hotels, emergencies: they can all be paid for with YOUR money. And when you pay with YOUR money, you don't have to worry about paying something off.