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SentencedTo7to10

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If I pay off credit card purchases the next day will I build up the same credit as end of month pay?
I use my cc for small purchases to build credit. Is it really true that bureaus will only register the account values left at the end of the monthly period or will the fact that I used the card throughout the month and paid it off as I went (within a week) help my credit? If I wait to pay til the end of month, do I get interest charges?

How do you know one way or the other? I see a lot of conflicting information everywhere and I just want to get back track. This credit rating system is certainly very imperfect and nontransparent.

Thanks

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Paying off credit cards early may help.

Helpful to 7 out of 7 people

Paying off credit cards, in some cases, can help greatly.

Research:

Two examples:

I tested this with a Lowe's card. I had about a 2,500 limit on the card. For about 4 months I made little purchases, about $1.00 to $20.00. Then I paid the card in full in within about 3 to 5 days of each purchase. Then after a few months of this I requested a huge limit increase and they raised my limit to almost $20,000. I called Lowe's credit and asked them why the limit was increased so very much. Lowe's said that it was because I paid extra fast. I asked them again what was the major factor in the huge increase of my card limit. They explained that it was directly due to my paying before the credit card bill was sent out and it was specifically because it was within a few days of the purchase. I asked them if my net income, was even considered and they said directly "no." I asked them if my credit report from experian or transunion mattered in this increase and they said "no." Lowe's credit said that paying fast, within days of the purchase, before the bill was sent out, was overwhelmingly important to them.

I was also doing this with Home Depot. I waited a whille and then asked Home Depot for the same amount of limit on my Home Depot card and they approved it.

Credit cards for personal use at these stores have been reported to be able to be up to $20,000. Then the card types change from personal to a similar to, or quasi, or full, business line type. Credit card limits above $20,000 by these type of companies are reported to be corporatly investigated for approval. Knowning this, I kept the personal credit card limit requests to below $20,000 and in one case received an approval over the phone in less than 30 seconds.

Conclusion:

Two credit card limits were increased almost to their design limits.

That means that my available credit was increased.

That means that for every dollar of credit use, my % utilization has decreased.

That means that it looks like by paying off credit cards early, meaning within about 3 to 5 days of the purchase, specifically as in these two examples, helped my credit score.

Reply to those that say not to pay early:

You are full of yourself. You need to think more, follow your own path that you know is factual, and stop following the crowd.

I expect a lot of flack from the brain-dead politically correct lemmings that cry loudly on street corners for public attention. But, I have the facts.

You now have a direct test with which to refer.

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Helpful to 54 out of 58 people

Good question and I'll give a quick answer for now.  When you get a credit card statement, there are two dates that are very important.  The obvious first one is "Date Due" which is the latest date you want your payment to go in. That's obvious.

But, another important date is "Closing Date".  That is the date used to tabulate all purchases made during the billing period so that the statement can be sent out to you.  If the closing date is the 15th of the month, anything purchased between the 16th of the previous period and the 15th of this will be included on the bill as the "Total Amount Due."  No interest is charged on purchases.

But an important "situation" with credit cards that I did not know until after joining Credit Karma  and reading the very informative articles is "usage" which basically means how much you use the card between billing periods.  Paying for a purchase the next day will end up NOT showing a usage percentage on the credit score which will hurt it.  While it may sound sensible, it doesn't work well in the credit game.

So, please wait for the bill to come and then pay the total amount due and make the time to read the articles here, because the purpose of Credit Karma is to teach people about credit and how to use it.

Hope this helps. 

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Helpful to 22 out of 22 people

People make rebuilding credit much more complicated than it has to be.

Credit utilization is extremely important and should be between 1-30%. If you are trying to build credit you should not be going over 30% utilization for any reason. Ideally you want to stay between 1-9% utilzation to build your score quicker.

Pay off your ENTIRE bill every month several days before it is due. The next day make another purchase to bring your credit utilization back up between 1-9% rinse and repeat.

Remember, at this stage you are proving to the credit companies that you can responsibly use a credit card. Keeping your credit utilization below 10% and paying off the entire balance every month is all you need to do.

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Quick fix?

Helpful to 1 out of 1 people

The only thing that raises your credit score quickly is on time payments, patience, and keeping utilization under 30%. I opened a fingerhut fresh start account. 6 months I've got from mid 400s to mid 500s and climbing. I'm hoping by Oct/Nov I'll be at a 600 or more and I can get a not so great rate for a vehicle.

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Usage vs. Credit Utilization

Helpful to 1 out of 2 people

Yes, but if one waits until the date due, and you used a high percentage of the card's credit line, then it hurts one's credit card utilization, doesn't it?  What's better?  High usage or lower credit utilization?  Which weighs more heavily on the cerdit score?

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