What If I Pay in Full?

Paying your balance off in full doesn’t necessarily guarantee a low debt usage ratio, because in many cases your balance will be reported before, not after, you make a payment. In the case of credit cards, for example, many issuers will report your balance at the end of the billing cycle, when they generate the statement. So let’s say your billing cycle for a credit card ends on January 20th. A few days later, you get a statement saying that you owe $495, with the option of paying that amount in full or making a minimum payment. Around the same time, your $495 balance will be reported to credit reporting agencies (Equifax, Experian, and TransUnion). You have until February 19th to make your payment, but whether or not you pay that entire balance off by that due date, the $495 debt will already have been reported and will be used to calculate your utilization.

Keep in mind that most business credit cards do not appear on an owner’s personal credit reports unless they fall behind on payments. A high balance on a business credit card may not impact your personal credit scores, though it could affect your business credit scores. You should always check with your credit card company to get the details on what will and will not impact your personal credit.


Some information on this page is adapted from content that originally appeared on Nav.com, a Venturize supporter.

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