Will carrying a credit card balance through month end hurt your credit score

Will carrying a credit card balance through month end hurt your credit score

As I vaguely mentioned in my $100,000 by Age 30 year end recap post my wife and I are starting to save for a house we want to build down the road (probably 2-3 years from now). While I’ve been planning this already for a few years, now that I have a savings account setup and a general timeframe in my head I’ve really started to up my planning and research.

One thing that I want to start preparing for is upping my credit score to get it as high as possible to make sure that I would qualify for the best rates. My credit score is not bad by any means, but I want to do everything in my power to get it as high as possible.

One item that I thought might be affecting my credit score is that my wife and I throw every possible purchase each month on our credit card in order to earn rewards points. This makes us about $50 a month in rewards. We pay the balance off in full each month, but I usually set the payment to hit about 2 days before the due date, because I like the feeling of using their money for free as long as possible.

The problem is, whenever I run a credit report on myself it looks like I always have a $1000-$2000 balance on the card because the payment doesn’t process until the middle of the following month. So even though I’ve never left a balance on a credit card in my life I look just like any other credit card junkie that does not pay off their balance each month.

I am assuming the credit card companies report balance information at the end of each month so I figured if I just paid the card off in full before the end of each month this should help my credit score. In the past I’ve always hesitated from paying it off before the statement came out because I worried I would not get credit for my rewards points, but I’m pretty sure this is not the case and will try it out.

Thoughts on this? Does anyone know when the credit cards report balances to the credit agencies?

  • j2r

    Don’t think there’s a set date for any of this.
    What I’ve read is that they recommend stop using your CCs 2 to 3 months before you apply for credit.

  • Most credit card companies report the balance as of the statement closing date. The magic number seems to be 1-9% of the credit limit since they like to see some use of credit, just not a lot. So pay most of the balance before the statement drops, and pay the rest before the due date.

    Fear not, you get your rewards anyway. 🙂

  • MFJ

    @Emily – Thanks that is good to know I guess I will just start paying off the balance in full a day or two before the statement date. Also very good to know it won’t hurt my rewards.

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