Pay Your Credit Card Bills Early to Boost Your Credit Score

Paying your credit cards on time is a no-brainer. But it might boost your credit score to pay your credit card bill early. Finance site Dough Roller explains how this is possible.

Thirty percent of your credit score is made up of your credit utilization—basically, how much outstanding debt you have. To calculate this, the credit bureaus check in on your credit each month, taking a "snapshot." Let's say they take the snapshot on the 15th, and you pay your bill on the 16th. Your credit utilization on record will still be higher, despite paying the bill the following day.

Dough Roller explains how you can get around this:

"If you consistently pay off your bill as soon as you receive it, your balance will remain lower. If, on the other hand, you continue to charge up the card between receiving your bill and paying it off on the due date a couple of weeks later, your reported balance will be higher. This increases the chances that when the credit bureau takes the snapshot, your credit utilization will be higher."

If your credit card balance is already low, I'm not sure how significantly your score will improve. Still, it seems like a simple enough tip. For more detail on credit utilization, check out their post in full.

Reader Tip: Pay Your Credit Card Bills Before They're Due | Dough Roller

Photo by Images Money.
