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.
The golden rule of Credit Cards is simple: pay your full balance on time, every time. This Credit Card payment rule helps you avoid interest charges, late fees, and potential damage to your credit score.
Paying your balance more than once per month makes it more likely that you'll have a lower credit utilization rate when the bureaus receive your information. And paying multiple times can also help you keep track of your spending and cut back on any overspending before you fall into debt.
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.
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.
According to cardholder reports, Bank of America uses a 2/3/4 rule: You can only be approved for two new cards within a 30-day period, three cards within a 12-month period and four cards within a 24-month period. This rule applies only to Bank of America credit cards, though, and not all credit cards.
50% goes towards necessary expenses. 30% goes towards things you want. 20% goes towards savings or paying off debt.
Assessing loan and credit costs
The Rule of 72 is also helpful in evaluating the impact of compounding interest on debt. A credit card debt with an 18% annual interest rate will double in just four years (72 ÷ 18 = 4).
If you missed a payment because of extenuating circumstances and you've brought account current, you could try to contact the creditor or send a goodwill letter and ask them to remove the late payment.
The three major credit bureaus—Equifax, Experian, and TransUnion—all update credit scores at least once a month. However, there isn't a specific day of the month when your credit report is guaranteed to refresh. Instead, credit score updates depend on when creditors report your payments to the credit bureaus.
Keeping a low credit utilization ratio is good, but having too many credit cards with zero balance may negatively impact your credit score. If your credit cards have zero balance for several years due to inactivity, your credit card issuer might stop sending account updates to credit bureaus.
Credit cards operate on a revolving credit system, which means that as you pay off your balance, your credit limit becomes available again for future purchases. So, if you have a credit limit of $5,000 and a balance of $2,000, you still have $3,000 available for new purchases even after the due date has passed.
It's possible that you could see your credit scores drop after fulfilling your payment obligations on a loan or credit card debt. Paying off debt might lower your credit scores if removing the debt affects certain factors like your credit mix, the length of your credit history or your credit utilization ratio.
Late or missed payments can cause your credit score to decline. The impact can vary depending on your credit score — the higher your score, the more likely you are to see a steep drop.
The golden rule of credit card use is only to make purchases you can afford. Never charge more on your card than you can pay back in full each month since interest can quickly snowball. Even if you can't pay off your full balance, always make at least the minimum payment by the due date.
FAQ on Credit Control: Prioritising Collections
Use the Pareto Principle (80-20 rule); that is, often 20% of your customers will account for 80% of the overall money owed to you.
Consumer Financial Protection Bureau Releases Final Rule on Credit Card Late Fees, with Overdraft Fees on Deck. On March 5, 2024, the Consumer Financial Protection Bureau (Bureau) announced the final rule governing late fees for consumer credit card payments, likely cutting the average fee from $32 to just $8.
There are some differences around how the various data elements on a credit report factor into the score calculations. Although credit scoring models vary, generally, credit scores from 660 to 724 are considered good; 725 to 759 are considered very good; and 760 and up are considered excellent.
Capital One also has a hard-and-fast rule when timing your applications. You're only able to get approved for one card every six months. This lumps personal and small-business cards together.
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 average FICO credit score in the US is 717, according to the latest FICO data. The average VantageScore is 701 as of January 2024.