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How can I use my new credit card to maximally benefit my credit score? (lemmy.world)

submitted 2 weeks ago* (last edited 2 weeks ago) by cheese_greater@lemmy.world to c/nostupidquestions@lemmy.ca

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for bills, is having it on autopay with the biller superior to using it manually to pay that biller? I prefer to manually manage all that as I have for years but I figure its beneficial to get that on a credit card and just make sure its paid off. I already basically use a bills bank account to do essentially this manually
only purchase what I already have set aside/budgeted for and can payoff before the grace period
anything else?

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[–] CorrectAlias@piefed.blahaj.zone 7 points 2 weeks ago* (last edited 2 weeks ago)

This isn't exactly true. I have a score above 820 and always pay my entire credit card balance off before it's due every month to avoid interest. In fact, most of my cards get almost no use, except for the one with the best benefits. I use the others sparingly, I only use them twice or so a year to keep them open.

I say "isn't exactly true" because of two things. Normally, the balance reported to the credit agencies aren't what the balance was when it was due. It depends on when the lender reports it to the agency. For example, most of mine appear to be mid-cycle. This allows me to pay it off with no hit to my credit, so long as I just keep using it regularly.

Second, if you have any other type of loan (car, mortgage, personal, etc) then it really doesn't matter. Those will almost always have a higher balance and payments anyway. Your credit score isn't from one single source unless you are brand new to lending. It actually will lower your score if you only have one loan as well, so it's important to keep accounts open (meaning you need to use your credit cards so they don't get closed) and in good standing.

Always pay credit cards off entirely so you don't give the bank your money. Always.