One of the tricks for better managing your credit report is to know when your credit card company reports to the bureaus. Each month all your creditors report to the credit bureaus, most report to all three (3) however some only report to one (1) or two (2). The only way you will know who is reporting to whom is to monitor all three reports carefully. Getting very familiar with your credit report will help you to better manage your profile.
Best practices are to always pay your credit cards/credit lines on-time and before they report to the bureaus, this way you can strengthen your rating and better reflect your creditworthiness.
The Rules of Payments
Most people know that late payments can put some strain on their credit score, so you never, ever want to be late. It is not only a bad habit to pay your bills late, it is also costly as high interest rates can make fees add up fast. We suggest paying on time and, when you can, even paying early. As soon as the statement arrives, write the check and make the payment. Making the payment for the credit card before the company reports will tell an untold story to the underwriters and will ensure that your credit report reflects that you are serious about your credit profile.
Here are some rules to follow:
- Pay on time. Early is best but at least before the due date.
- Pay more than the minimum. Paying just the minimum is a bad idea for several reasons but that is a different conversation. We recommend you follow your spending plan or pay at least 25% more than what you “must” pay.
- Automate your payments so they are received before the report date. It is easy to track payments and updates today. Most institutions and companies will have downloadable apps and online banking features that lets you know if payment was received and if is posted.
- If you are transferring balances it is vital that you do so before the statement report date or your credit may look lopsided with one new account opening with a high balance and one old account still reporting the same high balance.
Diligence in Key
Even when there are months that things are tight, being diligent about following the rules for payments is essential to improve your credit and maintain what you have. It is far easier to maintain a credit score than it is to rebuild it. Late pays even for a couple of months can be killer to your score. Late payments can stick around for the life of your credit history. Pay on time, and make sure your information is being reported accurately.