Does Your Credit Report Know You Pay off Cards?

If you're concerned about your credit score, pay attention to credit card accounts.  Especially if you pay them off.

Credit reports may show higher debt levels than you really have.  Most lenders send a monthly "snapshot" of your account balance to credit bureaus.  Depending on when they take the snapshot, your account balance can be low or high.

As you review credit reports, see if they paint an accurate picture of your debt levels.  If not, time your payments so that the account balance is low when the snapshot is taken.

If you recently paid off a credit card, credit reports may still show a balance for about a month.  Keep that in mind if you apply for an important loan after paying off debt.

Further reading:

• How Credit Scores Work
• A payment trick to boost credit scores