You're absolutely right. Making multiple payments or paying off purchases immediately doesn't directly impact your credit score. What matters most is that you make your payments on time and in full each month. This demonstrates responsible credit management and helps build a positive credit history over time.
Making multiple payments is not essential but rather beneficial for positively affecting your credit score. It is important to note that while making regular monthly card payments may help raise our credit score, it will not immediately impact it.
Credit card issuers assess interest based on your average daily balance, not your balance at the end of the month. Paying more than once per month — say, every two weeks — will reduce that average balance and, with it, your interest charges.
While it's perfectly fine to make that full payment once per month, it may be beneficial for your budget and credit score to make several small payments toward your balance instead, as long as they add up to your full balance owed.
The 15/3 rule, a trending credit card repayment method, suggests paying your credit card bill in two payments—both 15 days and 3 days before your payment due date. Proponents say it helps raise credit scores more quickly, but there's no real proof. Building credit takes time and effort.
The Takeaway
The 15/3 credit card payment rule is a strategy that involves making two payments each month to your credit card company. You make one payment 15 days before your statement is due and another payment three days before the due date.
Fewer interest charges
Credit card companies calculate interest based on your average daily balance. Making a payment halfway through the month could lower this number.
In most cases, the highest credit score possible is 850. You can achieve the highest credit score by taking a variety of essential steps. Still, for many people, it's difficult considering the range of factors that dictate the highest credit score possible.
Paying off your monthly statement balances in full each month is the path to avoiding credit card debt. As long as you pay off your statement balance in full before the due date, you can continue making purchases on your credit card without paying interest until the next statement due date.
If you make biweekly payments, that extra annual payment goes entirely toward the principal. This means that there is less money in the loan to charge interest. Consequently, you end up accruing less interest and will owe less money to your lender overall.
Once the incorrect information is changed, a 100-point jump in a month might happen. Large errors are uncommon, and only about one in 20 consumers have one in their file that could impact the interest on a loan or credit line. Still, it's important to monitor your score.
It's a good idea to pay off your credit card balance in full whenever you're able. Carrying a monthly credit card balance can cost you in interest and increase your credit utilization rate, which is one factor used to calculate your credit scores.
When you make multiple payments in a month, you reduce the amount of credit you're using compared with your credit limits — a favorable factor in scores. Credit card information is usually reported to credit bureaus around your statement date.
Paying early can offer a safety net when you're near your credit limit and interest charges could push you over the limit. If that happens, you may incur an over-the-limit fee from your credit card company.
Generally, your overpayment will appear as a credit in the form of a negative balance on your account. This negative balance will roll over towards any new charges you make or outstanding balances for the next month.
Even better, just over 1 in 5 people (21.2%) have an exceptional FICO credit score of 800 or above, all but guaranteeing access to the best products and interest rates.
A credit score of 900 is not possible, but older scoring models that are no longer used once went up to 900 or higher. The highest possible credit score you can get now is 850.
The 15/3 hack claims you can help your credit score dramatically by making half your credit card payment 15 days before your account statement due date and the other half-payment three days before.
Consistently paying off your credit card on time every month is one step toward improving your credit scores. However, credit scores are calculated at different times, so if your score is calculated on a day you have a high balance, this could affect your score even if you pay off the balance in full the next day.
Amex 2-in-90 rule
American Express restricts card approvals to no more than two within 90 days. This means that even if you follow the 1-in-5 rule above and get two cards more than five days apart, you still can only get those two cards within 90 days. So far, there are no exceptions to the Amex 2-in-90 rule.
Overall, Credit Karma may produce a different result than one or more of the three major credit bureaus directly. The slight differences in calculations between FICO and VantageScore can lead to significant variances in credit scores, making Credit Karma less accurate than most may appreciate.