You mightve seen this advice pop up on your TikTok feed: You can raise your credit score by making multiple payments during a billing cycle.
And while we’re all for paying your credit card bills in full and on time every month, does paying more frequently really help? We asked our CNET Money experts to weigh in.
Having a good credit score is important for getting approved for loans and credit cards with favorable interest rates. Many people wonder if making multiple payments on their credit cards each month can help improve their credit scores. In this article, we’ll explore whether making two payments a month on your credit cards can benefit your credit score.
How Credit Scores Are Calculated
Before diving into the impact of multiple monthly payments, it’s helpful to understand what factors determine your credit score The FICO credit score, which is used by 90% of lenders, ranges from 300 to 850. It is calculated based on these five factors
- Payment history (35%) – Whether you pay your bills on time. This is the most important factor.
- Amounts owed (30%) – Your credit utilization ratio or how much of your available credit you are using.
- Length of credit history (15%) – How long you’ve had credit accounts opened.
- New credit (10%) – How frequently you open new credit accounts.
- Credit mix (10%) – The variety of credit types you have, such as credit cards, loans, mortgages, etc.
The number of payments you make does not directly influence your credit score However, it can impact the two biggest factors – payment history and amounts owed
Can Multiple Payments Improve Your Payment History?
Your payment history makes up 35% of your credit score. This refers to whether you pay your bills on time or have any late payments. Payment history looks at your last 12-24 months of payments.
Making multiple payments can help you avoid late payments if you struggle to pay the full balance by the due date. For example, you could make two $200 payments instead of one $400 payment. As long as you pay the minimum by the due date, this will help your payment history.
However, you do not need to make multiple payments every month if you regularly pay your balance in full and on time already. If you have a good payment history, making one monthly payment is sufficient.
Can Multiple Payments Lower Your Credit Utilization?
The second biggest factor is your credit utilization ratio or the amount you owe versus your credit limits. Experts recommend keeping this below 30%. The lower your utilization, the better for your credit score.
Making multiple payments can pay down your balances faster, which lowers your utilization. Let’s say you have a $1,000 credit card balance and a $5,000 limit. That’s a 20% utilization ratio. If you make two $200 payments, your balance drops to $600, lowering your utilization to 12%.
Paying more than the minimums lowers balances quicker. Just keep in mind you need to make at least the minimum payment by the due date to avoid late fees or interest charges.
Strategies for Making Multiple Monthly Payments
If you want to start making multiple credit card payments per month, here are some tips:
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Automate payments – Set up automatic payments for a percentage of your balance weekly or biweekly. This prevents forgetting to make manual payments.
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Pay early in the billing cycle – Make a payment soon after the billing cycle closes. This gives you more runway to pay down balances.
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Pay right before the due date – Pay a chunk of your balance a few days before the due date. This ensures you get the payment in on time.
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Pay on different days – Making payments on your paydays can help align with your cash flow.
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Divide minimum payments – If you can’t pay in full, divide minimum payments in half and pay biweekly or semimonthly.
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Pay extra when possible – Anytime you have extra funds, make an additional payment to knock down balances.
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Focus on maxed-out cards – If you have multiple cards, target cards with maxed-out or close to maxed-out limits first.
Potential Downsides of Multiple Payments
While multiple payments have benefits, there are a few potential downsides to consider:
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Transaction fees – Some credit cards charge a fee for each payment, so multiple payments increase costs.
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Prepayment penalties – A small number of credit cards penalize you for paying early by charging interest even if you pay in full.
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Disorganization – Making many separate payments can lead to confusion on whether you paid bills or not.
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Lower monthly statements – If you pay early in the cycle, your balance may seem deceptively low when your statement cuts.
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Increasing debt – The convenience of making smaller payments can backfire and cause you to overspend.
As long as you avoid these pitfalls, the benefits typically outweigh the risks of paying multiple times per month. However, it’s not mandatory to pay multiple times if you’re already paying on time and maintaining low balances.
Tips for Improving Your Credit Beyond Multiple Payments
While making two or more payments can optimize your credit card habits, there are other ways to boost your credit score:
- Maintain low credit utilization across all your cards, not just one.
- Build your credit mix by adding installment loan products like a small personal loan.
- Never miss payments and correct any late payments already on your report.
- Limit new credit card applications to avoid too many hard inquiries on your report.
- Build your credit history by keeping old accounts open.
- Check your credit reports and dispute any errors with the bureaus.
- Become an authorized user on someone else’s old credit card account.
Good credit habits like paying on time, keeping low balances, and having a mix of credit types will benefit your scores over time. Consider multiple payments a supplemental strategy, not a magic bullet, for credit improvement.
The Bottom Line
Does making two credit card payments a month help your credit score? Paying more than once per month can assist in avoiding late payments and lowering credit utilization. Both these factors make up 65% of your credit score calculation.
However, it is not mandatory to pay multiple times monthly in order to have good credit. Those with excellent payment histories and low balances can stick to single payments. Weigh the pros and cons before deciding if making two payments per month fits your financial habits and needs.
Monitoring your credit reports and scores frequently enables you to make informed decisions about payment frequency. Healthy credit behavior over the long-term, like keeping card balances under 10% of limits, results in the best credit outcomes. While extra payments help optimize balances, proper day-to-day credit management is most important.
Does making multiple credit card payments in a billing cycle help your credit score?
While making multiple credit card payments during a single billing cycle could be good for your credit score, it isnt because of the number of payments you’re making.
Rather, the additional payments can both reduce how much available credit youre using and ensure youre making an on-time payment — the two most important factors for determining your credit score.
“The common misconception is that paying a credit card bill more than once per billing cycle will count as multiple on-time payments, but that is not true,” said Daniel Braun, credit card expert and CNET expert review board member. “Only one on-time payment will be recorded for each monthly billing cycle, so making multiple payments might only help credit utilization if that is your goal.”
Your available credit compared to how much debt you have is known as your credit utilization ratio. The less credit you use (meaning, the lower your credit card balance is), the more it can help boost your credit score. The golden number touted by experts is typically less than 30%, but keeping it at 10% or lower is even better.
How to use multiple credit card payments to help your credit score
Making multiple payments to help reduce your balance, and thus your credit utilization, is a good way to improve your credit score, but timing the payments is also important. Heres how to strategically plan your multiple payments to maximize their impact:
- Find out the close date for your credit cards billing cycle. You can usually find this information by logging into your account and finding where it says “next statement closing” (its likely listed in your account info). With most issuers, that’s the date your balance gets reported for scoring purposes, said Mark Reese, credit card expert and CNET expert review board member.
- Monitor your daily balance. If you can, make at least a partial payment two or three days before your billing cycles close date, then pay off the remaining balance by your due date. “Using this method allows you to engineer a better credit score because it causes a lower balance to get reported, but you still end up paying off the entire amount owed by the due date on your bill,” Reese said.
- Reduce your overall utilization. Ultimately, you want to reduce your credit utilization, which you can do by continuing with the two-payment method, reducing your overall spending or requesting a higher credit limit. If you do request a higher credit limit, avoid spending more as this will just raise your utilization rate again.
Pay Your Credit Card Bill on 2 Specific Days to Increase Your Credit Score
FAQ
Is making 2 payments a month good?
Paying your credit card twice a month is usually a good thing. Making multiple payments helps lower your credit utilization, potentially boosting your credit score. It can also reduce the amount of interest you pay by decreasing your average daily balance.
What is the 15 3 credit rule?
Is it better to pay credit cards twice a month?
… mortgage payments, paying off your outstanding credit card debt two or more times per month instead of only once can reduce the total amount owed in interest
How to get a 700 credit score in 2 months?
Does making two credit card payments a month improve your credit score?
Yes, making two credit card payments monthly can improve your credit score mainly by lowering your credit utilization ratio. Multiple payments lead to a faster reduction in your outstanding balance, resulting in a lower reported utilization rate to credit bureaus. This lower utilization is viewed positively and can boost your score.
Does making more than one credit card payment increase your credit score?
Making more than one payment each month on your credit cards won’t help increase your credit score. But, the results of making more than one payment might. What Impacts My Credit Scores the Most? The number of payments you make each month is not listed in your credit report, and credit scoring systems don’t take that into consideration.
Should I pay my credit card twice a month?
Paying your credit card twice a month is usually a good thing. Making multiple payments helps lower your credit utilization, potentially boosting your credit score. It can also reduce the amount of interest you pay by decreasing your average daily balance.
Can you make multiple payments a month?
The number of payments you make each month is not listed in your credit report, and credit scoring systems don’t take that into consideration. However, two things are likely to happen when you make multiple payments each month. First, the minimum amount you owe will almost certainly be paid each month. That means you won’t have any late payments.
Does paying credit card twice a month reduce interest?
Making multiple payments helps lower your credit utilization, potentially boosting your credit score. It can also reduce the amount of interest you pay by decreasing your average daily balance. Overall, more frequent payments contribute to better credit management and can save you money.
How many times can you pay a credit card in a month?
So paying $200 three times during the month results in less interest than paying $600 at the end of the month. Can I make 2 credit card payments a month? With some card companies, there is no limit to how many payments you can make in a month, but there may be a limit to the number of payments you can make in a 24-hour period.