In this article I would like to cover a strategy for those who use credit cards, especially for those who rack up high balances each month for the miles.  What many don’t know is approximately 1/3 if your credit score centers around the ratio of the amount of debt in relation to your credit limit on your revolving debt.  Installment loans and mortgages don’t impact the score in the same way revolving debt does so it’s very important to keep this ratio in check when applying for financing of any kind.  This can also affect your score even if you pay off the full balance each month but I have a strategy to help you with this.

Here is a strategy for those who run up high balances each month but pay off the debt in its entirety . First let me explain when most credit card companies report to the 3 major bureaus; this usually happens within just a day or 2 of the statement being generated which typically doesn’t give a person enough time to get the statement and make the payment before they report.  The easiest thing to do is to mark your calendar 5 days prior to the statement date, pay off the balance at that time and they will report a very small balance rather than a complete month’s worth of usage.  This strategy has helped many of my clients maintain much higher scores.  I hope this helps you as well

Cary Donham

Branch Manager Dallas