How to trick the algorithms into boosting your credit score by 20+ points in 30 days before a mortgage or auto loan application.
"Paying your bill on the due date is fine for avoiding interest, but it might be killing your credit score. The secret is knowing your 'Statement Closing Date' and paying the balance off 3 days before that date."
Most people believe that if they pay their credit card bill in full every month, they have perfect credit habits.
This is false.
You can pay your bill in full every single month and still have a mediocre score because of a metric called Utilization. This metric accounts for 30% of your FICO score, and it is reported to the bureaus at a specific time that most people don't know about.
Banks do not report your balance to credit bureaus on your Due Date. They report it on your Statement Closing Date.
This gap causes a problem. If you run up a $5,000 balance on a card with a $6,000 limit, and the Statement Date hits, the bank reports 83% utilization. Even if you pay it off completely two weeks later on the Due Date, the damage is already done. The bureau sees you as "high risk" for that month.
The Hack: You must make your payment 3 days before the middle orange dot (Statement Date).
If you are applying for a mortgage or auto loan in the next 30 days, implement the AZEO method (All Zero Except One).
On all cards but one.
On your primary card.
Once the statement closes and the score updates, you can pay off that final $10 before the actual Due Date to avoid any interest.
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