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You might think your credit score can only go up if you’re paying your credit card balance in full every month. If you are, you’re doing amazing — but your credit score may not benefit as much as you think.

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In fact, one big factor in your credit score could be suffering if you wait until your official due date to make a credit card payment.

Let’s dive into what it is — and how you can raise your credit score with a simple change in your habits.

Your credit utilization ratio

Your credit utilization ratio is a huge factor in your credit score, and it’s easy to figure out what yours is. Just divide your total revolving debt (namely, your credit card balances) by your total available credit.

If you owe a total of $3,000 on two credit cards with a combined spending limit of $12,000, then your credit utilization ratio is:

$3,000 / $12,000 = 0.25, or 25%

You want your credit utilization ratio to be low — ideally, 10% or lower. That’s a sign that you’re not borrowing too much money, and it will also help you achieve an excellent credit score.

Why your credit utilization ratio may be higher than you think

Most credit card companies report your account info to the credit bureaus — the companies that maintain your credit history — once a month. Your credit utilization ratio is based on this monthly snapshot.

Many card issuers report to the bureaus at the end of each statement period — that’s when they tell you how much you owe. Your payment due date will likely be a few weeks after that.

That means paying your balance in full on your due date does not guarantee a credit utilization ratio of 0%. When it comes to your credit score, what really matters is your balance when your card issuer reports to the credit bureaus.

A simple way to maximize your credit score

If you want to keep your credit utilization ratio as low as possible, there are two simple ways to do it:

• Find out when your card issuer reports to the credit bureaus, and pay your balance in full before that.
• Pay off your credit card every day that you use it so your balance stays at $0.

If your credit card balance is low (or nonexistent) when your card issuer reports to the credit bureaus, your credit score could improve instantly.

And if you want another easy way to lower your credit utilization ratio, you could request a credit limit increase or open a new credit card. Either way, your available credit will go up, which means your credit utilization will go down.

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Opening a new card may slightly decrease your score in the short term, but it will be a positive in the long term so long as you make on-time payments.

Just be sure not to take on more credit if you are unable to pay off your credit cards on time and in full. Otherwise, a higher spending limit could land you in high-interest debt.

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