Increase Your Credit Score by Paying Down Your Balances

Oct 10, 2020

This is a strategic tip that the author uses for raising his credit score while paying down the balance.

Prerequisites:

  • The due date and closing date of your credit cards you want to pay down
  • Extra discretionary income used for paying down the balance (e.g. ride share driver, gig economy worker, etc.)
  • Determine the amount you can comfortably pay extra on your targeted credit cards pay down?
  • Setup online bill pay for all credit card accounts.
  • Obtain your credit reports and identify the reporting date for each credit card. MYFICO.COM alerts is a good source when your creditors are reporting your activity.

Backgroud:

Your due date is when your minimum payment is due and to avoid a late notice on your credit report, while the closing date is when new interest, if any, calculated to your balance and your credit card issuer updates your credit report.

Strategy:

On a notepad calendar, list your pay dates the estimated amount. If you are deriving income from GIG Economy work, this amount is your average or minimum goal that you can consistently earn?

Next to each pay date, identify the closest credit card closing date. If you have two credit cards with the same closing date, you can choose to split the extra payment between these two credit cards, or make an extra payment on one credit card a week earlier and the second credit card the week before the closing date.

Example:

There are three credit cards totaling $3000 balance and pretty much each credit card is above 50% credit utilization. Two credit cards have a due date on the 9th of the month with the closing date on 13th of the month, while the third credit card has a due date on the 21st and a closing date on 25th of the month. An extra weekly payment of $400 can be consistently made during the pay down period. Pay date is every Wednesday.

Credit Card #Pay Date
19/23/2020
29/30/2020
310/7/2020
110/14/2020
310/21/2020
310/28/2020

Order your Combined Credit Report

Order your combined credit report after your creditors have reported the reduction in balance. If you subscribe to MYFICO.COM, the alerts will show the dates when the balance was decreased. Make note of these reporting dates on your calendar just as you made note for the due and closing dates.

For example, if there are three credit cards with the following reporting dates: 16th, 18th and 30th day of each month. You will want to order your combined credit report on the 1st day of the month following your previous months payments. This is especially important when using MYFICO.COM and their quarterly free combined credit report.

If you order your free quarterly combined report from MYFICO.COM before your pay down efforts have been reported, then you will be looking at an analysis using out dated data. Then you have to wait another quarter for your next free quarterly combined report. Otherwise, you may need to purchase an interim combined report.

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Survival Revealed originally created as a pamplet in 1989 to help a person get back on their feet. Survival Revealed offers real life tips to survive life shortcomings and excel.