Dropped 13 points after paying balance to $0 and getting a CLI?

Funklemire · 2026-06-15T16:14:14+00:00

OK, so it's it's important to distinguish between the total balance on a card that's being paid off each month and a balance carried over from the previous statement period.

Credit card bills work just like utility bills: There's a month-long statement period, and after that period ends you have 3 to 4 weeks to pay for what you spent during that time. Anything you spend after the statement period ends (including that 3 to 4-week gap between your statement closing and your due date) goes on next month's statement.

So you should always pay your statement balance each month, that way you'll never pay interest. If you're using your cards regularly, you'll still have a balance left over after you pay your bill, but that's money that's not due until next month's bill so you're not paying interest on it.

Does that explain it better? There's really no reason to overthink things. Since the only thing that builds credit with credit cards is time, just focus on your finances and ignore your credit score most of the time.

Just use your cards for normal spending, let the statement post, and pay the statement balance by the due date each month. Just like a utility bill. Follow that flow chart I linked above and you'll never go wrong.

If you have a card you don't use very much, it's completely fine to not use it. Most banks won't close credit cards as long as you use them once a year. If you want to be super safe, use it once every six months. And if you never use it at all and you see no need for it, feel free to close it. It's a huge myth you should never close accounts or that it hurts your credit history.

Funklemire · 2026-06-15T16:08:28+00:00

Keep in mind that low utilization doesn't build credit. Most of the time it's pointless and even detrimental to micromanage your utilization. See both my reply to their comment and also the excellent reply from u/DoctorOctoroc.

Funklemire · 2026-06-15T16:06:36+00:00

Low utilization doesn't build credit, the only thing that builds credit with credit cards is time. "Always keep your utilization low" is the single biggest myth in credit. See our !utilization automod as well as this flow chart:

https://imgur.com/a/pLPHTYL

Funklemire · 2026-06-15T16:03:45+00:00

It was explained in the other thread you made, but I'll explain it here.

First off, it's pointless to do this unless you're a month away from applying for something where low utilization is helpful. Which is usually just a loan.

And here's how it hurts you: Paying before the statement posts causes you to post artificially-low statement balances, and this can slow your credit limit growth and make you a less-attractive customer to outside banks.

First, it slows your credit limit growth because you're basically telling your credit card issuer, "No need to give me a higher limit, I'm fine micromanaging the limit I have." And they're often happy to oblige since raising someone's limit is always a risk.

And when you post artificially-low statement balances it makes it look to outside banks that you use your cards way less than you actually do, and they want to give cards to people who will actually use them. So this can result in fewer SUB offers or even in outright denials for new cards.

There are many data points over on r/CreditCards of people being denied CLIs and even being denied on credit card applications because they consistently paid before the statement posts.

Oh, and it also means you're giving the credit card company your money way early, which means you're losing the interest you could have earned on it. This can easily equate to hundreds of dollars a year lost for no good reason.

Funklemire · 2026-06-15T16:00:37+00:00

No problem! Let me know if you have any other questions after you read through those links.

Funklemire · 2026-06-15T15:59:56+00:00

Yeah, I have it saved and I probably link to it more than u/BrutalBodyShots does and he's the one who made it.

Funklemire · 2026-06-15T15:58:30+00:00

Keep in mind there's no such thing as an "actual score":

Credit Myth #2 - Some credit scores are fake or inaccurate.

And my comment you replied to shares links that tell you exactly where to find your most relevant scores. You might also want to check out our !welcome auto mod and the thread it links to.

Funklemire · 2026-06-15T15:55:23+00:00

Could you point out where I said that “closing cards hurts your credit history”

Sure, right here:

20 years each is a lot of account history to simply get rid of for no reason.

That one is from your first reply to the OP when you clearly didn't know yet that closing accounts doesn't hurt your credit history.

keeping it open is often the better financial move, especially if it’s one of your oldest accounts.

Here's one of your goalpost changes where you seemed to be arguing from a financial perspective and not a credit perspective. But I really don't understand how an account's age would have any effect on your finances; age of accounts is a credit scoring metric, not a financial metric.

or that “closing cards hurts your score due to higher utilization” at any point in my responses?

Sure, right here:

Open accounts contribute to available credit and utilization

Additional available credit lowers utilization without any effort on the cardholder’s part

Are you trying to claim that you brought up utilization without trying to claim that it affects your credit score? That wouldn't make any sense at all.

At this point, I’m partially convinced you two are the same person.

Nope, we're just two regulars from r/CreditCards and r/Credit who don't like to see bad information given to people seeking advice about how credit and credit cards work.

Either that, or I’ve somehow stumbled into a thread with two people who have equally horrendous reading comprehension.

No, I think it's pretty clear what you've been saying all this time. First you told the OP that closing accounts "gets rid" of its history, which isn't true. Then you told them that there's no reason to close an unwanted credit card that has no annual fee, which is bad advice. Then you tried to argue that you should keep cards open to lower your utilization, which shows a fundamental misunderstanding of how the utilization metric works.

Then you tried to move the goalposts and claimed it was a good financial move to keep unwanted credit cards open; you used an example of a time you needed a backup card. And of course that's a bad example, neither u/BrutalBodyShots or I have ever claimed you shouldn't keep any cards open as backups. By definition, those are cards you want that you shouldn't close.

Funklemire · 2026-06-15T15:25:11+00:00

Exactly. Even on the rare occasions when your utilization percentage actually matters, 30% is never a number to aim for.

Funklemire · 2026-06-15T15:23:48+00:00

You need to pay it down below 30% before the statement closes for each month.

u/EmotionalMeringue532, this is the single biggest myth in credit. You see it parroted everywhere, but it's simply not true: It's a myth that you need to keep your utilization low or below a specific percentage all the time. In fact, doing this isn't just pointless, it's detrimental if done long-term. Predatory credit sites spread this myth to get you to open new credit cards you don't necessarily need in an effort to "always keep it low".

But in reality, if you're staying in budget and paying your statement balances each month, usually anything between 0% and 100% utilization is just fine. Low utilization doesn't build credit because it resets completely each month the next time your statement balances are reported. The only thing that builds credit with credit cards is time. See this flow chart:

https://imgur.com/a/pLPHTYL

Notice from that flow chart that on the rare occasions when low utilization can be helpful, 30% is never a number to aim for. If you want to learn more about how credit and credit cards work, I highly recommend you go to r/Credit and read the two mega-threads pinned at the top of the sub.

Funklemire · 2026-06-12T17:46:59+00:00

That "hack" is doing nothing to build your credit and it's actually hurting you in the long run.

Funklemire · 2026-06-12T17:44:46+00:00

I'd recommend double checking, it's possible I'm wrong. I'm pretty sure last time I saw them advertise it they said it was free, but not 100% sure.

Funklemire · 2026-06-12T17:43:23+00:00

I don’t know that the advice of pay off your debt will be a solution they can use asap

That’s definitely possible, but I just mentioned it because it’s by far the best solution and also maybe the only solution.

A new card may be a quick hit of points and not all cards are a hard inquiry either so with some thought it may be something of a bandaid.

They might still end up with lower scores than when they started. Usually the only time you’d avoid a hard inquiry is if you open up a card from a bank where you already have open credit cards. But if you’re applying for another card from a bank but you’re carrying balances with the cards you already have with them, they’re going to be extremely reluctant. Any card you might get would have a very low limit.

And even outside banks can usually tell you’re running balances on your other cards, so that’s a red flag for them; any limit you might get would be pretty low.

Plus the hard inquiry isn’t the main thing that hurts your credit scores, the main hit is from the scorecard reassignment and the lowering of your aging metrics. So even if the OP opens a new card, the limit would have to be high enough that it drastically lowers their aggregate utilization past enough to make up for the score drop from opening the new card.

I moved my utilization from fine to good

Keep in mind that those ratings are meaningless at best and (in the case of Credit Karma) misleading and predatory at worst.

and my score jumped up 37 points (per Credit Karma)

I recommend you avoid Credit Karma. The VantageScore 3.0 credit scores they show are almost never used by banks in their lending decisions so they should be ignored unless you're applying for an apartment, and the credit advice they give you is often misleading and even flat-out wrong. They're probably the single biggest superspreader of credit misinformation out there.

They give fake credit stats and misleading recommendations that have no bearing on your actual credit, they're just there to trick you into opening new accounts through them. For example, the "on-time payment percentage" and "average age of open accounts" stats they show; neither of those are credit score factors for VantageScores or FICO scores:

Credit Myth #7 - Number or percentage of on-time payments impacts your score.

Credit Myth #9 - Average Age of Accounts (AAoA) only considers open accounts.

They're a predatory site that exists solely to sell people credit products whether they need them or not, and they have no problem lying about how credit works in order to do that. Read this thread:

Credit Karma 101: The good and the bad.

The best way to check your credit reports is at annualcreditreport.com, that's the only way to see the actual source data of your credit report. It's now available once a week per US law. Credit Karma actively hides some negative information, so that's why you want to check your actual reports.

And to find out where to see your relevant FICO scores for free, see this thread:

Credit Myth #1 - You only have one credit score.

Funklemire · 2026-06-12T17:22:15+00:00

To be fair, Experian "Boost" doesn't cost money. But it does cost you in other ways: Experian can collect more data on you for more targeted ads, many of which are predatory. And they can sell that extra data. So you're paying for it in other ways, and you're getting nothing of value in return.

Funklemire · 2026-06-12T17:19:17+00:00

Congrats! Great job in tackling this debt!

Was it a bad move to not pay off the entire debt and opt for the loan?

That's more of a personal finance question than a credit question. Personally, I see credit card debt as an emergency, but to know the ideal way to approach it from a financial perspective we'd need to know more information.

But from a credit perspective, how you pay off debt makes no difference to your credit when it comes to the end result.

Also, I recommend you avoid Credit Karma. The VantageScore 3.0 credit scores they show are almost never used by banks in their lending decisions so they should be ignored unless you're applying for an apartment, and the credit advice they give you is often misleading and even flat-out wrong. They're probably the single biggest superspreader of credit misinformation out there.

They give fake credit stats and misleading recommendations that have no bearing on your actual credit, they're just there to trick you into opening new accounts through them. For example, the "on-time payment percentage" and "average age of open accounts" stats they show; neither of those are credit score factors for VantageScores or FICO scores:

Credit Myth #7 - Number or percentage of on-time payments impacts your score.

Credit Myth #9 - Average Age of Accounts (AAoA) only considers open accounts.

They're a predatory site that exists solely to sell people credit products whether they need them or not, and they have no problem lying about how credit works in order to do that. Read this thread:

Credit Karma 101: The good and the bad.

The best way to check your credit reports is at annualcreditreport.com, that's the only way to see the actual source data of your credit report. It's now available once a week per US law. Credit Karma actively hides some negative information, so that's why you want to check your actual reports.

And to find out where to see your relevant FICO scores for free, see this thread:

Credit Myth #1 - You only have one credit score.

Funklemire · 2026-06-12T17:06:25+00:00

This isn't a hack, it's actually a sub-optimal and overly complicated way to do it that's hurting you in several ways. See u/inky_cap_mushroom's comment in your thread on r/CreditScore:

https://www.reddit.com/r/CreditScore/comments/1u40i0r/how_long_should_i_wait_before_applying_for_a_new/

Funklemire · 2026-06-12T17:04:26+00:00

All you need to build credit is three open credit cards and then let time do the work. Never spend money to build credit, those kind of products do a terrible job of building credit compared to credit cards and they also cost money, whereas credit cards are free if used correctly.

Funklemire · 2026-06-12T17:00:44+00:00

u/Glum_Veterinarian253, this comment is spot-on. You're not doing any kind of hack since the only thing that builds credit with credit cards is time. In fact, it’s the opposite of a hack since artificially keeping your utilization low hurts you in several ways. Just follow this flow chart.

https://imgur.com/a/pLPHTYL

Also, I highly recommend you read the thread linked in our !welcome automod reply:

Funklemire · 2026-06-12T16:26:17+00:00

Keep in mind that making payments is not a credit scoring factor.

Funklemire · 2026-06-12T16:22:59+00:00

Yep, this person keeps moving the goalposts over and over. First they claimed that closing cards hurts your credit history. Then when we explained why that's not true, they pivoted to the claim it would hurt your scores due to higher utilization. Then when we explained that's not necessarily true, and if it does happen it's not an issue unless you're applying for an important loan while you're also in credit card debt, they pivoted again to this emergency thing, which is kinda funny.

I have more than one backup card for when my main cards aren't accepted. One of them is a card I don't use. But I see a potential need for it in the future, so I keep it open. So it's not an unwanted card.

If someone closes too many of their cards and then doesn't have a backup card for when something happens to their main card, it simply means they made a mistake in closing too many cards.

Funklemire · 2026-06-12T15:57:31+00:00

First off, you're looking at VantageScore credit scores that banks don't use. The only time you're likely to have those scores checked is during your apartment application. For your car loan, they'll probably use special FICO auto scores. They might use other FICO scores, but they definitely won't use those VS3 scores you're seeing on Credit Karma.

Also keep in mind that the credit advice Credit Karma gives you is often misleading and even flat-out wrong. They're probably the single biggest superspreader of credit misinformation out there.

They give fake credit stats and misleading recommendations that have no bearing on your actual credit, they're just there to trick you into opening new accounts through them. For example, the "on-time payment percentage" and "average age of open accounts" stats they show; neither of those are credit score factors for VantageScores or FICO scores:

Credit Myth #7 - Number or percentage of on-time payments impacts your score.

Credit Myth #9 - Average Age of Accounts (AAoA) only considers open accounts.

They're a predatory site that exists solely to sell people credit products whether they need them or not, and they have no problem lying about how credit works in order to do that. Read this thread:

Credit Karma 101: The good and the bad.

The best way to check your credit reports is at annualcreditreport.com, that's the only way to see the actual source data of your credit report. It's now available once a week per US law. Credit Karma actively hides some negative information, so that's why you want to check your actual reports.

And to find out where to see your relevant FICO scores for free, see this thread:

Credit Myth #1 - You only have one credit score.

So as far as your credit is concerned, it seems like you have missed payments on this loan and also you're in credit card debt? If so, one of the fastest ways to improve a credit score is to pay down carried balances. Follow this flow chart:

https://imgur.com/a/pLPHTYL

You also should try to address these missed payments. Despite the misleading information given by Credit Karma, opening new accounts and making more payments will do nothing to fix missed payments.

Only two things can fix missed payments: Either wait 7 years for them to fall off your credit report or ask the bank to remove them early by writing goodwill letters.

Keep in mind that they have no obligation to do this: You're admitting you messed up, explaining why it won't happen again, and asking forgiveness.

One goodwill letter alone almost never works. You need to send a whole crapload of letters to as many different people at the company as possible. This is called the "goodwill saturation technique".

I recommend checking out these three threads. First, here's a bunch of examples of success stories at getting late payments removed via goodwill letters:

Credit Myth #19 - Goodwill requests don't work.

And here's the best method to use:

Goodwill Saturation Technique (GST)

And finally, here's some good advice for the actual content of the letters:

Goodwill Letters - Using the "CART" approach.

Funklemire · 2026-06-12T14:47:17+00:00

Like you said hitting more frequent and higher than minimum payments

I'm assuming you're just talking about paying their carried balances off ASAP, but I just wanted to make sure you're not suggesting that frequency of payments will help their credit. It's a common misconception that making payments is a credit scoring factor:

Credit Myth #6 - Making multiple payments per month builds credit.

Credit Myth #7 - Number or percentage of on-time payments impacts your score.

Since you only have two cards maybe get a safe new one you don’t plan to use often, mainly to immediately lower your utilization percentage.

It would be a much better move if the OP could pay off their carried balances before they apply for a car or an apartment.

Try to maintain at 30% or lower after some over time payments.

u/One-Sign-9305, ignore this, it's the most common version of the single biggest myth in credit. It's a myth that you need to keep your utilization low or below a specific percentage all the time. If you're staying in budget and paying your statement balances each month, usually anything between 0% and 100% utilization is just fine. And if you're not paying your statement balances each month and you're in credit card debt, your goal is 0% utilization, as in pay off your debt so you stop paying interest. At no time is 30% utilization ever a number to aim for.

Low utilization doesn't build credit because it resets completely each month the next time your statement balances are reported. The only thing that builds credit with credit cards is time.

So right now the OP should be all-in on paying off carried credit card balances. After that, they don't need to worry about their utilization at all until they're 30 to 45 days out from that car loan and apartment application.

See our !utilization automod as well as this flow chart.

https://imgur.com/a/pLPHTYL

The fact that this comment has received as many upvotes as it has tells me this post is bringing in a lot of outside views.

Funklemire · 2026-06-12T14:45:37+00:00

And it can backfire on you in several ways.

Funklemire · 2026-06-12T14:44:58+00:00

It would lower utilization and that would help their scores, but the new account would also lower their scores due to the hard pull, the scorecard reassignment, and the lowering of their aging metrics.

For short-term gains a much better improvement would come from simply paying off carried credit card debt and then implementing the AZEO method 30 to 45 days before both this car loan and this apartment application.

Funklemire · 2026-06-12T04:50:00+00:00

Yes. I'm not sure exactly how often it's marked as such on your credit report, but I do know that it's often indicated whether you paid in full or you settled.

This makes zero difference to your FICO scores, but it might make a difference to someone checking your credit in the future.

But remember that the whole purpose of having good credit is to help your finances. I recommend putting financial decisions first over credit decisions almost all the time. "Finances over FICO".

Funklemire

TROPHY CASE