Shhhh! The Credit Card Secret That Could Boost Your Credit

Even if you have a good credit score, you may still want to find a way to boost your credit, especially if you want to take out a loan soon.

Even if you have a good credit score, you may still want to find a way to inch that magical number higher, especially if you are in the market for an auto loan or a mortgage in the near future. Even at a 700, an extra twenty points or so could easily bump you into a lender’s higher credit tier and net you a lower interest rate.

So, how do you get an increase when you’re already in the “good” range?

The Trick Is …

As you may already know, one of the largest factors in determining your credit scores is your credit utilization ratio, or how much debt you have compared to your credit limits. Paying attention to this aspect of your scores just might be the ticket.

No, that doesn’t mean it’s essential to carry a zero balance to have a good credit utilization ratio. In fact, credit experts recommend keeping your debt level at 30%, ideally 10%, of your total credit limit. So, how do you get your ratio in that sweet spot?

One way — often the most commonly noted way — is to only charge up to that amount before paying down your balance.

But here’s the secret: the timing of your credit card payments.

The Importance of Timing

Typically, even if you’re paying your balance every month by or on the due date, the balance shown on the statement date (also called the closing date) is the amount reported to the credit bureaus for that month, Barry Paperno, a credit expert who blogs at Speaking of Credit, said. When your credit scores are pulled, that balance, even if you have since paid it off, will still be reported and can affect your credit utilization. By adjusting when you make your payments, you’ll have more control over what effect your spending has on your credit.

Beyond that, Jeff Richardson, spokesperson for VantageScore Solutions, said that credit bureaus now compile data over time, in addition to just the snapshot.

“This new kind of data shows when you paid and how much in addition to whether it was on time so they can see if you’re a revolver (debt carrier) or a transactor (someone who pays balances off entirely),” Richardson said.

Credit scores don’t generally take that data into consideration right now. Still, “a lender or credit issuer for a mortgage or an auto loan can pull that data and use it to reward the transactors with better loan terms.” (Note: This isn’t always done, but is possible.)

As such, you may want to pay your credit card charges off as you go or at least before your credit card statement’s closing date (more on this below).

Figuring Out When to Pay 

Take a look at your last credit card statement. If your statement date is November 10, the balance on that date is likely what was reported to the credit bureaus, regardless of the payment due date. Keep this in mind as you make your payments, since it will give you a better idea of what your reports are showing as your utilization.

“To reduce that balance reported or avoid having it reported at all, don’t wait for your next statement to come,” Paperno recommended. “Instead, go online to see the up-to-date balance and you’ll know exactly what to pay before the closing date.”

What Kind of Credit Score Bump Might You See?

There certainly isn’t a guarantee that you’ll see an increase because of this payment adjustment. However, Paperno said he saw about a ten-point score difference on his already high scores, just about a month after implementing this change. Maybe ten points doesn’t seem like much, but it could bump you from a prime credit score to a super prime credit score, possibly saving you thousands of dollars in interest payments.

“This is one of the few things you can really control about credit scores so it’s worth it to take advantage of it if you can,” Paperno said.

To see how your habits are affecting your credit scores, you can take a look at two of your credit scores for free, updated every 14 days, on

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Hate Credit Cards? There’s Still a Way to Build Credit & Avoid Debt


If you want to build credit, don’t want to go into debt and don’t want to use a credit card, you’ve got a bit of a problem. You can definitely build credit without going into debt, but that generally requires using a credit card. There are plenty of ways to build credit without using a credit card, but they generally require going into debt. It’s frustrating, we know.

Things like utility payments and rent are sometimes reported to the credit bureaus and are factored into a few credit scoring models, but it’s far from the industry standard right now. There’s some good news, though: There’s a debt-free, low-maintenance, credit-building strategy you might not despise.

Step 1: Check Your Budget for a Recurring Bill

Most people have at least one consistent monthly expense. These are often subscriptions (like Netflix or a magazine) or small bills (like an insurance premium or a cell phone bill). Many of these can be set to automatic payments, and many of them can be paid with a credit card without an additional credit card processing fee. See if you can find one. Got it? OK, you’re not going to love this next step, but give it a chance before you freak out.

Step 2: Get a Credit Card (Wait, What?)

Yes, this strategy requires a credit card, but you hardly ever have to use it. You may never take it out of your wallet (and, really, you could probably just keep it locked up at home). If you don’t have a credit card, you’ll first want to check your credit score, which you can do for free on, to see what you might be able to qualify for. There are credit cards for people with bad credit and no credit, but keep in mind that some credit cards carry annual fees or require a deposit in order to access a line of credit. Still, you can get a credit card for a relatively low cost (or for free), and if you pay off the balance on time every month, your purchases won’t accrue interest. (See? No debt.)

Step 3: Pay Your Small, Recurring Bill With Your Credit Card

Set up your automatic payment to hit your credit card.

Step 4: Pay Your Credit Card Bill

You can either manually pay your credit card bill as soon as the other bill payment hits, or you may want to set up another automatic payment, this time for your credit card. Make sure you’re paying it on time and in full each month, because that’s what’s going to build a positive credit history and keep you from going into debt.

Step 5: Check Your Progress

It’s easy to “set it and forget it,” and that’s sort of the idea here, but you don’t want to forget it and accidentally miss a payment because you haven’t updated your account or a payment didn’t go through as it was supposed to.

Some Extra Tips

When you’re deciding if this strategy is right for you (and it’s not for everyone), remember that part of what builds a good credit score is using as little of your available credit card limit as possible. So, if you have a very low credit limit on your credit card, the bill you choose to pay with it should be fairly inexpensive, if you want to get the most out of this strategy. Making sure this goes right requires attention to detail — it can backfire if you miss a credit card payment, max out the credit card or miss the bill payment and it ends up in collections — and it’s also a good idea to check your credit score regularly to make sure it’s having the effect you want it to.

Find the perfect credit card for you using our credit card finder tool.

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