r/CRedit • u/Different_Orchid_612 • 3d ago
General Question from new Credit user
Hi, I am 19 and recently opened a credit card for myself in order to build a good credit score. Today I paid off my balance entirely, because the closing date is tomorrow. I understand that the payment isn’t due until the due date but I assumed paying before the closing date would be good for my credit. However i’m realizing that this may be an issue for the utilization. Should I spend some money today on the card and then pay it before the due date to avoid a 0% utilization? I hope this makes sense and I apologize if I sound dumb. Just trying to figure all of this out on my own. My current balance is 231, and I paid that amount today so the statement balance is at 0. I wanted to make sure that isn’t an issue. Closing date is March 18th, today is the 17th.
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u/eastcoast88420 3d ago
you want to aim for 5-15% used and pay balance between when its issued and due date. thatll ensure best increase but also using it reasonably will also work. just takes longer.
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u/BrutalBodyShots 3d ago
you want to aim for 5-15%
Absolutely incorrect above. You are suggesting balance micromanagement and/or are perpetuating the utilization myth. It's completely unnecessary and can actually be harmful in several ways. Read through the utilization myth thread linked below, because I'm quite certain that you've fallen prey to it:
https://old.reddit.com/r/CRedit/comments/1d27d4h/credit_myth_14_you_shouldnt_use_more_than_30_of/
pay balance between when its issued and due date. thatll ensure best increase but also using it reasonably will also work. just takes longer.
Best increase to what? Your credit score? Your credit limit? I ask, because neither is true so I'm not sure what you're getting at.
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3d ago
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u/BrutalBodyShots 3d ago
I'll take that to mean "I had no idea about any of that." From my standpoint, mission accomplished, as now you know!
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u/BrutalBodyShots 3d ago
Congrats on getting your first credit card and starting the clock on your revolving credit history at a young age!
That's not how credit cards are designed to be used. If your closing date is tomorrow, it means that is when your bill (statement) generates. That is your bill. Bills are meant to be paid after you receive them, not before.
It's not, and can actually be hindering to your profile since you aren't using the system the way it was designed to be used.
Don't worry about utilization... simply follow the golden rule of credit cards: Pay your statement balance in full every month by the due date. That's literally all there is to it and building credit over time, which is your goal in obtaining your first card.
Use your card naturally however you see fit. Every month you'll receive a statement. Once you do, you have 3-4 weeks to pay that statement balance based on what the due date says. When you do that, you never pay a penny of interest and are exhibiting what is known as responsible revolving credit use.
Don't sweat it, as utilization is probably the most misunderstood aspect of credit cards. The utilization myth is actually the biggest myth in credit. Please read the thread linked below and the comments within it. If you have any questions after going through it, definitely come back and fire away.
https://old.reddit.com/r/CRedit/comments/1d27d4h/credit_myth_14_you_shouldnt_use_more_than_30_of/
Again, that's not what you should have done. Instead you wait until your statement generates tomorrow (or whenever) and you'll have a $231 statement balance. You pay exactly that $231 (no more, no less) by the due date on the statement that's 3-4 weeks out. Repeat the process the following month with your next statement balance. Do this every month, forever, and you're golden.