Credit card utilization
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I have a question about balance-to-limit ratio (credit utilization). I’m trying to keep my utilization low, so every week or two I go online and pay my entire balance. Is this a better way to build credit than wait for the statement ?
You need your statement to show more than $0
This may be lowering your utilization, but if your statement shows $0 then it won’t build credit for you.
In order to build good credit you need to actually use your credit card. Getting a statement with $0 has the same effect as not using the card.
Credit card companies report to the credit bureaus once a month, usually at the closing date. So in most cases, what they report to the credit bureaus is what appears on your statement.
If you go online and pay the balance before the closing date, your statement and the credit report will both show $0 balance. So it is true that your utilization will be low (0% for this card), but it won’t build credit for you.
Better to wait for the statement and then pay it in full, or, if you prefer go online befor the closing date but pay just some of the balance, so that your statement won’t show $0.
Good luck.
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