The Frugal Creditnista

The Goal is to Increase Credit Scores, NOT Increase Debt!

Should I leave a balance? Should I charge up as much as I want and then pay before it reports the high balance to the credit bureaus? Should I always pay in full?

I get these questions daily, especially in my Facebook Community, Credit Makes Sense.

The goal is to increase your credit scores, not to accumulate debt.

Should you leave a balance? It's not necessary, although I have seen people gain a few points by doing so when they are rebuilding. However, if you are rebuilding your finances as a whole, your goal is to build positive financial behaviors as well.

So, if your credit is laden with a lot of debt and late payments, then paying IN FULL and by the STATEMENT DATE (not due date) is helping you accomplish your ultimate goal: To develop better financial behaviors that will help you accomplish your future financial goals.

As far as paying by the reporting date, I see a lot of people using credit cards as an extension of their income — entertainment, bills, shopping, travel, etc. Therefore paying before the higher balance reports to the credit bureaus becomes a norm.

Then they wonder why they aren't able to save as much, pay down their student loans, start a college fund for their kids, etc. Well…. you're paying on that credit card you ran up. (Yes, I know emergencies happen, even when you have an emergency fund, so this is not talking about that situation). All dollars matter 🙂 If you need an extension of your income, get a side hustle, that's what MNH FInancial started out as while I was trying to survive the real estate market in 2008+, and look where it is now 🙂

Hope this helps!!!

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