When to pay my credit card statement to build good credit
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This is a follow up query to one of my earlier query (Credit limit & Credit Inquiries).
It was indeed very helpful. I have couple of more questions
1. I want to know regarding the time by which I pay my outstanding bill. I tend to pay my outstanding bill before the due date. I’m just curious if paying the outstanding bill a considerable number of days before due date can help for a better credit score. For ex assuming that my due date is 30 days later from current date and I decide to pay my outstanding in next 1 week. Will it help me in getting a better score early?
2. I have only 1 credit card. I’m planning to apply for another credit card so that I have more than one account in my report card. Would like to know if it is advisable to have an additional card.
The reason I am asking these questions (1 and 2) is to have a good credit score in the minimum possible time (without applying for loan or any other such stuff). I have read multiple forums but am still not clear on the aspects and hence the questions.
3. How can I start a credit score for my wife (she does not have a SSN but has ITIN)
It doesn’t matter how many days before the due you pay
As long as you pay before the due date – it’s good enough. It makes no difference if it’s 1 or 20 days before.
Just make sure you pay after you get the statement. If you pay your balance before the closing date, your statements will show $0 balance. Since the credit card companies send their data to the credit bureaus at the closing date each month, if your balance is $0, then it will have the same effect as not using the card at all, and that WON’T build credit for you.
So wait for the statement, and pay in full any time before the due date.
As to the number of credit cards, having another credit card may help a bit. Having a different type of credit (e.g. car loan, personal loan or mortgage) would help your credit much more.
The BEST way to jump start your wife’s credit is to put her as an authorized user on your credit card. It’s called Credit Piggybacking, it’s perfectly legal and Fico acknowledges it. Your credit card will be reported to both of your credit reports, and will build credit for both of you.
Using ITIN to get credit is against the law, and can get you into trouble. If she has no SSN, she needs to use her state’s ID instead.
Hopes this helps
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