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When to pay credit card to improve credit score

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When to pay credit card to improve credit score

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Navigating the world of credit cards and credit scores can be a complex task as you work towards building a strong financial foundation. In this article, we will discuss the importance of responsible credit card use and offer insightful tips on when to pay your bills to boost your credit score. By understanding the factors that contribute to a good credit score, such as credit utilization ratio and payment history, you can make informed decisions regarding your credit card management.

When to Pay a Credit Card's Bill

As a credit card user, you should always aim to pay your credit card bill before the payment due date to avoid late fees and potential harm to your credit score. However, if you're looking to improve your credit score faster and more effectively, consider paying your bill before the statement closing date. This allows you to maintain a lower credit utilization ratio, which is one of the factors that contribute significantly to your overall credit score.

How to Build Good Credit

Building good credit requires a combination of responsible credit card use and understanding the factors that can impact your credit score. Here are some key tips to follow:

  • Pay your bills on time: Your payment history is the most critical factor in determining your credit score. Late or missed payments can negatively affect your credit and remain on your credit report for years.

  • Keep your credit utilization low: Credit utilization is the ratio of your outstanding balance to your available credit limit. Aim to keep this percentage below 30%. A low credit utilization ratio indicates that you are using credit responsibly and not relying on it heavily.

  • Apply for new credit judiciously: Avoid opening numerous new credit accounts in a short period. Each time you apply for credit, a hard inquiry is made on your credit report, which can temporarily lower your credit score.

  • Maintain a diverse mix of credit: A healthy mix of credit accounts—such as credit cards, retail accounts, mortgages, and installment loans—can positively impact your credit score.

When to Pay Your Balance Early

Paying your balance early not only helps you avoid late fees but also lowers your credit utilization ratio, making it an essential strategy for improving your credit score. Some instances when paying your balance early can be beneficial include:

  • When you expect to make a large purchase and want to maintain a low credit utilization ratio.

  • Before applying for a loan, mortgage, or new credit card, as lenders and creditors may review your credit utilization ratio.

  • When you know your statement closing date, as early payment can help ensure a lower balance is reported to credit bureaus.

Is it Better to Pay Off My Credit Card in Full?

Paying off your credit card balance in full each month is an effective way to build good credit. Carrying a balance from month to month can lead to increased interest charges and higher credit utilization ratios, negatively affecting your credit score. Paying off your balance in full demonstrates financial responsibility and healthy credit management.

Will Paying My Credit Card Bill Early Affect My Credit?

Paying your credit card bill early can positively affect your credit score, as it can lower your credit utilization ratio and keep your credit report in good standing. Lenders and creditors may view early payment as a sign of responsible credit management, which can increase your chances of receiving favorable loan terms and credit offers in the future.

Does Paying Off a Loan Help or Hurt Credit?

Paying off a loan can initially result in a slight dip in your credit score due to the closure of an account, but this usually levels off with time. In the long run, successfully paying off a loan demonstrates good financial management and contributes positively to your overall credit history.

When You Should Change Your Bill Due Date

You may choose to change your credit card bill due date to align better with your cash flow, such as coordinating it with your payday or other bill due dates. This can help ensure that you have sufficient funds to make on-time payments and avoid late fees or negative impacts on your credit score.


Understanding when to pay your credit card bill and using credit cards responsibly are crucial components to improving your credit score. By focusing on credit utilization ratios, payment history, and the options available through institutions like Royal Bank of Canada (RBC), you can effectively use credit cards to boost your credit score. Stay informed about your credit score and make strategic decisions about your credit card usage to reap the maximum benefits.

Note: KOHO product information and/or features may have been updated since this blog post was published. Please refer to our KOHO Plans page for our most up to date account information!


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