Does my credit rating increase if I pay off any balances on my credit card before the bill is generated?
I generally pay off any credit card balance immediately and I never owe anything at the bill date (i.e. I buy something online with my credit card and then within a day or two pay it off from my chequing account). Does this impact my credit rating at all, or should I wait until the bill arrives and then pay it all off at once?
Secondary question: If I get a second credit card (for safety purposes) and barely use it, will this impact my credit rating/score as well?
I'm looking to ensure I am doing all that I can to increase/maintain my good credit rating.
*Please explain how, positively or negatively it affects it.
Yes your rating will go up. It will go up even if you carry a balance on the card as long as you do not use more then 30% of the credit line.
As to paying off the balance very month I will quote FICO "Even if you pay off your credit cards in full every month, your credit report may show a balance on those cards. The total balance on your last statement is generally the amount that will show in your credit report."
All this means is that the CC companies report only that you paid on time and the balance owed. As long as you pay before the reporting date, your balance will stay at $0 and it will show paid as agreed/account in good standing. This is a good thing.
Now as to opening another account you score will drop a little bit due to the hard inquiry being placed by the creditor when you apply for the credit. Don't open a number of new credit cards that you don't need, just to increase your available credit. This approach could backfire and actually lower your FICO score.
Hope this answers your question.
i would think soo
References :
of course It does,but be aware that they aren't collecting any interest from you
References :
Actually score wise it makes no difference weather you pay in advance or not as long as your payment is there and posted to your account by the due date.
Another card used for every day things and paid in full before the due date will help your score.
To have the very best score and profiles people need 3-4 credit card accounts (revolving) with balances below 30% of their limits and 2 cars, boats, homes, motorcycles, computers, furniture or personal accounts (installment) all with good long payment history's.
References :
Finance Manager for over 9-years / 2008 edition Consumer Action Handbook / Friend works for Transunion.
I would wait to get the bill and pay off the balance each time. I use my credit card for second credit and use it occasionally to keep it active and pay off to show on any credit report, this will all up your credit scores
References :
Yes your rating will go up. It will go up even if you carry a balance on the card as long as you do not use more then 30% of the credit line.
As to paying off the balance very month I will quote FICO "Even if you pay off your credit cards in full every month, your credit report may show a balance on those cards. The total balance on your last statement is generally the amount that will show in your credit report."
All this means is that the CC companies report only that you paid on time and the balance owed. As long as you pay before the reporting date, your balance will stay at $0 and it will show paid as agreed/account in good standing. This is a good thing.
Now as to opening another account you score will drop a little bit due to the hard inquiry being placed by the creditor when you apply for the credit. Don't open a number of new credit cards that you don't need, just to increase your available credit. This approach could backfire and actually lower your FICO score.
Hope this answers your question.
References :
http://www.myfico.com/Default.aspx