How Your Credit Score Can Drop Even If You Pay in Full and on Time
Credit Card Encourages Enthusiasts, Take Note. Having a large balance on your credit card will obviously affect your account, but even if you pay it off in full and on time, that balance can still affect your credit.
Your credit and payment history obviously make up the bulk of your account . However, the use of your credit also plays a big role. Your use is how much of your available credit you are actually using. As Bloomberg explains, even if you don’t update your credit card balance, your score can drop if you use up most of the available credit.
They explain that most issuers report their balances to the credit bureau around the end of the billing cycle, before you actually pay the bill. This gives the impression that you are using your available loan, which is correct, but you are also paying it off and the bureaus do not see it, so they cannot take it into account in their calculations.
To combat this, they suggest paying off your balance about a week before the close of the billing cycle. For more details, navigate to the full Bloomberg article at the link below.
How To Quickly Raise Your Credit Score | Bloomberg