Q: I have been paying down debt and I haven't charged any new items, except on my American Express business account, which I pay off every two months. Yet my score has declined about ten points every month for the past five months. Shouldn't my score be going up?
Your American Express card may say it's a "business account," but if it appears on your credit report, the credit bureau considers it a personal card -- and transactions on it are factored into your credit score. So paying off your balance every two months is hurting you. Paying a revolving debt more than 30 days late is one of the red flags that can hurt your score, explains Steven Katz, a spokesman for credit bureau TransUnion.
"The computer model that generates your credit score is looking for a long record of credit accounts that you have paid on a timely basis." Katz recommends that if you cannot afford to pay off the balance each month, you should at least make the minimum payment.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Andy Jolls, of credit-education Web site VideoCreditScore.com, goes even further. He recommends making two payments each month so that your balance will be low when data is sent to the credit-reporting agencies. (The date of transmission may not be the closing date for your account.) That will improve your credit-utilization ratio -- that is, your current balance in relation to your credit limit.
| Row 0 - Cell 0 | Credit & Money Management |
| Row 1 - Cell 0 | Compare Credit Card Offers |
| Row 2 - Cell 0 | More Credit Card Q&As |
-
A Lesson From the School of Rock About the MarketsIt's hard to hold your nerve during a downturn, but next time the markets take a tumble, remember this quick rock 'n' roll tutorial and aim to stay invested.
-
I retired at 65 with $7.8 million and feel like I over-saved. My 40-something son is on the same path. Should I tell him to reconsider?We ask financial experts for advice.
-
Amazon Resale: Where Amazon Prime Returns Become Your Online BargainsFeature Amazon Resale products may have some imperfections, but that often leads to wildly discounted prices.
-
Roth IRA Contribution Limits for 2025Roth IRAs Roth IRAs allow you to fund your retirement with after-tax dollars while you're working, and then withdraw those contributions and earnings tax-free when you retire. Here's a look at 2025 limits and income-based phaseouts.
-
Four Tips for Renting Out Your Home on Airbnbreal estate Here's what you should know before listing your home on Airbnb.
-
Five Ways to a Cheap Last-Minute VacationTravel It is possible to pull off a cheap last-minute vacation. Here are some tips to make it happen.
-
How Much Life Insurance Do You Need?insurance When assessing how much life insurance you need, take a systematic approach instead of relying on rules of thumb.
-
When Does Amazon Prime Day End in October? Everything We Know, Plus the Best Deals on Samsonite, Samsung and MoreAmazon Prime The Amazon Prime Big Deal Days sale ends soon. Here are the key details you need to know, plus some of our favorite deals members can shop before it's over.
-
How to Shop for Life Insurance in 3 Easy Stepsinsurance Shopping for life insurance? You may be able to estimate how much you need online, but that's just the start of your search.
-
Five Ways to Shop for a Low Mortgage RateBecoming a Homeowner Mortgage rates are high this year, but you can still find an affordable loan with these tips.
