How to Pay Your Credit Card Bills Strategically to BOOST Your Credit Score!

Daniel Rosen  0:00  

Hey, Credit Heroes. A couple of weeks ago, I edited a tech talk video with tips about exactly when to pay your credit card to boost your credit. And a tonne of people watched it. And they had a lot of questions. So that's why today I'm going to cover everything you need to know to boost your credit scores by paying your credit card bills strategically, so you better stick around. 

So the big question is this: how can we take our passion for helping people with their credit and turn it into a successful business without taking loans without spending a fortune by bootstrapping it from nothing? So we can help the most people and still become highly profitable? That is the question, and this podcast will give you the answer. My name is Daniel Rosen, and welcome to credit repair business secrets. If this is your first time listening to my podcast, every week, I give credit repair tips and advice on bootstrapping your business from nothing. So be sure to click subscribe now and get ready to start changing lives. 

Okay, let's get into this years ago, when I was in show business, I would have such long gaps between gigs that I basically lived on my credit cards, and my credit cards were always maxed out. And if I did have any available funds on one card, I would get a cash advance on it to pay towards my other cards. And by doing that, I got deeper and deeper into debt. And at one point, I was over $200,000 in debt. And when I did have a gig, even if it was a big gig, all that money would go to pay just the minimum payments, and there was never anything left. And there was no way for me to get ahead. And my credit score really suffered. Because back then, I didn't know any better. 

So, I was caught in their trap. But now, after learning so much about credit and helping so many 1000s of people to improve their credit, I see all the ways that I screwed up. And my biggest mistake back then was not understanding exactly how credit cards work. And now I know how to game the system to boost your score, even if you have credit card debt. And that's exactly what I want to share with you today. 

So, let's start with the basics. Your credit card bill or your credit card statement is a snapshot of your credit usage. It shows your transaction balance and the due date. Paying your credit card bill on time is very, very important for avoiding late fees, saving money on interest and maintaining a good credit standing. But did you know that the actual timing of your payments can also greatly impact your credit score? Well, that's right, it can. When you pay your credit card bills strategically, you improve your payment history and your credit utilization ratio, which together make up two-thirds of your credit score. That means how you handle paying your credit card bills impacts your score more than any other factor. And today I'm going to break down exactly how to do it to get the maximum score. 

For those of you new to the world of credit repair. There are five main factors that determine a credit score: 35% is payment history, whether you pay on time late or miss payments 30% is credit utilization. This is the ratio of how much credit you have available and how much you are using. For example, if you have a credit card with a $10,000 limit and you're carrying a balance of $9,000, that means your credit utilization ratio is 90%, which is very, very high and can hurt your score of 15% credit history 10% is credit mix. And the last 10% is determined by recently opened new credit accounts. 

This means that over half of your credit score is determined by your payment history and your credit utilization alone. So the biggest improvement you can make is by strategizing exactly when to pay, how much to pay, and never to miss a payment. When and how much you pay will vary depending on your situation. But what's not negotiable is missing payments. You must never ever miss a payment. 

Overall, the only bad time to pay off your credit card balance is after the payment is due. This can bring a lot of negative effects. Your credit score can drop, but you'll also have to pay late fees and interest, and paying more than you have to is not a good idea either. But if you're paying your balances in full every single month before you get your credit card bill, then the credit bureaus might not see that you're actually using This credit, which really doesn't do much for your credit score. 

So when exactly should you pay your credit card bill? Well, here's what you need to know. The key to boosting credit scores by paying bills strategically is understanding when your credit information is reported to the credit bureaus. There are two important dates on every credit card statement: the statement date and the due date. They may sound similar, but there are some very big differences that you need to be aware of. The statement date is the last day of your billing cycle. When your statement balance is calculated, and your credit card statement is generated. It usually occurs around 21 to 25 days before your payment due date. This is also the day when your credit card balance is reported to the credit bureaus. 

The payment due date is the last day you can pay your credit card bill without incurring a late fee. You need to pay at least the minimum amount due by this date to avoid late fees. Let me give you an example. So you have a better understanding of how this all works. You have that one credit card with a $10,000 limit. And during one month, you go on a trip, and you spend $9,000. Now, if you wait until your credit card bill comes in the mail, your credit utilization rate of 90% will already be reported to the credit bureaus. The higher your credit utilization is, the higher the risk you appear to be to lenders. And this is going to have a negative effect on your credit score. Financial experts will tell you that the ideal ratio for credit utilization is roughly 30% or less across all your credit accounts. 

Still, use this same example. Imagine instead that you made an early payment towards your $9,000 credit card balance so that by the time you get your credit card statement, you'll only have a $3,000 balance. Once this information gets reported to the credit bureaus, it'll show that you're using the card to build positive credit history and you have a 30% credit utilisation rate. This means that lenders will see your behavior as you're using the card responsibly, and it will really improve your credit score. But you still need to make sure that you always pay your balance in full by the payment date so that you don't get hit with potential late fees or worse. Now let's talk about another strategy for paying off your credit card, which is auto payment. Each person has a different billing cycle. 

So, every situation will vary. But if you take a simple approach rather than calculating your credit utilization and making your payments early, this is what I recommend. Every single credit card company has an auto payment feature; they usually have two options: make the minimum payment every time your balance is due or pay your balance in full whenever a new balance is due. My suggestion is to always have the auto-pay set four to five days before your balance is due and have it set to auto-pay for the new balance. This way, you'll never miss a late payment, which will save you from late fees. And you'll also not just be making the minimum payment. So you're saving money by avoiding the interest. But here's an important note. 

If you do decide to have your balance paid in full every single month with auto payments, do not make any extra payments. If you do, you may be overpaying, and you'll have a negative balance on your credit card, which means that the credit card company has this cash of yours sitting there until you spend it or ask for a check. If you want six months of Credit Repair Cloud software for free and access to our advanced disputing and business courses, go to creditrepaircloud.com/freetraining and sign up for our master class. And here's my final point. You're not just paying bills. You are managing your credit. 

These small strategic steps lead to a boosted credit score and a better financial future. So mark your calendars and set your bill payments scheduled. And now, for my favorite part of the episode. Every week, I feature one of our Credit Heroes inside our Credit Repair Cloud Facebook community so that you can see firsthand what real people are doing as they run and grow their businesses. Today's spotlight is on Vincent Trefethen. Vincent posted in our community that I raised my score from the low six hundred to seven hundred times to help some clients. Congratulations, Vincent. Starting with your own credit is such a smart move because you get to learn the basics of credit repair and feel the benefits yourself, and you get to be the first success story for your business. I cannot wait to see whose life you'll change next. 

And I'll end by saying if you don't already have a Credit Repair Cloud account. Check it out. out. It's a software that most credit repair businesses in America run on. Just sign up for a 30-day free trial at creditrepaircloud.com/freetrial. And if you'd like to change lives and grow your very own credit repair business, check out our Credit Hero Challenge. It's a live experience that has helped tonnes of Credit Heroes to get certified in disputing and gain confidence as they run their credit repair business on a solid foundation. So they can change a whole lot of lives and make a great living in the process. We're starting the next challenge very soon. So you want to join before the doors close, are you gonna have a long wait until the next one? So sign up right now at creditherochallenge.com. 

And if you're finding value in the things that I share on this podcast, click below to subscribe and follow. Also, give me a five-star review or share the show and help me to change more lives. If you'd like to read the show notes, they're posted on my blog. If you have a question or comment, drop it down below because I read each and every one of them, and I would love to hear from you. And I'll respond as soon as I can. If you want to learn more strategies for building credit, check out my episode, The Ultimate Guide to Credit Builder Loans. So take care, credit hero, and keep changing lives. 

Hey, everybody, it's Daniel again. And really quick, I'd like to invite you to join what I believe is the best thing we have ever created inside the Credit Repair Cloud community. It is a challenge that we call the Credit Hero Challenge if you're just planning out your business, or you're just getting started, and you dream of having a successful business of your own. So you can quit your nine-to-five, fire your boss, and have financial freedom, or you can add another revenue stream to your existing business. If that's your dream, you need to get into this challenge. We created this challenge to help you create and launch your very own credit repair business to build a proper foundation for a really successful business. This challenge is going to help you understand the strategy, tactics, and all the things you need to be successful at credit repair. It really is the greatest thing we have ever built, and it will change your life. So I recommend you do it right now. Stop everything, pause this audio, go online, and go to creditherochallenge.com That's creditherochallenge.com and join the next challenge. And there's a challenge that starts in just a few days. So go get started right now at creditherochallenge.com.