Question:

Does it build credit to pay things off in one payment?

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Does it build credit to pay things off in one payment?

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8 ANSWERS


  1. Depends upon the situation.  If you take out a loan and pay it off in one payment, then that is a good thing.

    Credit card use can negatively affect your credit score, even if you pay off your credit card balances every month.  Example:

    You use your credit card to purchase gas, groceries, and everything else each month, always spending around $1,500 each month.  When the bill arrives, you pay the balance in full.  You would think this is good for staying out of debt and paying off the balance in full each month, but not when you consider how it appears on your credit report.  What is your credit card issuer reporting to your credit report each month -- the total amount you owe at the time of the report and that you pay on time, not the fact that you pay your balance in full each month.  Therefore, on paper, it looks like you carry a $1,500 balance on your credit card and never pay it off.  

    The way to avoid this is to have 2 or 3 credit cards and rotate them, using one for a few months, then using another, so that your credit card company can report a zero balance every few months to the three credit reporting agencies.

    Hope this answers your question.


  2. No, The best thing to do is pay around $20 more than the minimum payment every month and keep your credit card limit under 50% of the limit. Creditors like to see you making payments and that helps your credit score a lot more than paying it off in one payment (plus they don't like it cuz they make more money with interest if u don't pay it all off at once). Its horrible. I used to work at a bank in the finance department so that's how I know all this. If you want some more info about everything, go to freecredittips.com, and they have a lot of info on there. I hope that helps, & if u have anymore questions about it, feel free to email me :)

  3. They perfer that you pay things off slowly because they make more money off of you that way. I hear that it's actually better for your credit just to make close to the minimum payment on time each month, however if you have the money to pay off a card or whatnot, I would.

  4. The best way to build your credit is to make on-time payments.  Usually loan companies want to see a years worth of on-time payments.

    Make sure that you avoid the steps that will hurt your credit as well.  The mistake that most people make is, applying for alot of credit cards.  This will hurt your credit.

    If you have high interest rates, pay those off, use one credit card to make small on-time payments every month, and save the rest of your money.

  5. No. Just do a google search on credit scores. I believe loaners want to see you can borrow money and pay it off on time for consecutive payments before they loan to you.

    I went to expedian (since I have an account through USAA..and it does mention paying something off in full does help credit a bit. but not as much as paying it off over time. Same thing goes for credit cards... never pay one off and close it. Creditors want to see your dept vs payments.

  6. I don't believe it matters how long you take to pay it off, the big factor is NEVER being late or defaulting

  7. yes it does

  8. Yes it does....but regular payments with a fairly low balance is also very good.  If you have more than one credit card then use one for most purchases and carry a fairly low balance and use the other to buy one thing every month and pay it off right away.  Then you are covering both ways and you will establish excellent credit.

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