Difference between reporting a $0 balance and inactivity?

[Anonymous]

If I'm always paying off my balance in full and therefore reporting a $0 balance, does that ever eventually report as inactivity?

How long can you not use a card before it gets reported as "inactive"?

[Anonymous]

Welcome to the forums ~

I would have to say no, paying in full doesn't show inactivity. You're showing activity every time you use your credit card. Paying it off in full each month is a good thing and can save you money in interest. The other side of this is if you have limited or no credit you would want to purchase something and make 3 or 4 monthly payments on time and then pay it off. The reason is creditors want to see how you are going to handle the credit you've been given and want to see responsibility with on time monthly payments which can help you get approved for better credit cards and CLI's.

Each merchant is different on how long a card can be inactive. Once it goes inactive the creditor will "close" the account for "inactivity" and the card will no longer be valid. For example: I had a Jared's Jewelers card for a while and after "2 years" of inactivity they closed the account. So, it can be 1 year - 1.5 years - 2 years, it just depends on the credit card company.

Hope this helps!

[Anonymous]

No reports to credit if your balance is $0 , thats what i read. 

[Anonymous]

I don't think I was quite clear in my first post, so I apologize for any mistranslations. What I mean to ask is: let's say I pay off all my balances and always reporting $0 every month, for 2 years. How can the credit beraus know if I'm using the card or it's just inactive? They both report a $0 balance so how can they tell?

[red259]

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@Anonymous wrote:

I don't think I was quite clear in my first post, so I apologize for any mistranslations. What I mean to ask is: let's say I pay off all my balances and always reporting $0 every month, for 2 years. How can the credit beraus know if I'm using the card or it's just inactive? They both report a $0 balance so how can they tell?

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I'm not 100% sure if the lenders report to your credit report if you had activity and PIF before statement cuts. If they do then other lenders could see your last payment amount so they would know you used that card and paid it off. Doesn't change the score vs a card in the SD, but it would be seen on a manual review. Again I don't know for sure if a lender would report the activity if you had a zero balance? Maybe it varies from lender to lender? 

[dragontears]

Date of last payment is reported for all my accounts, even the ones with a $0 reporting balance.

[vanillabean]

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@dragontears wrote:

Date of last payment is reported for all my accounts, even the ones with a $0 reporting balance.

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Do you have any Amex cards? Because none of my Amex cards update the activity date when the balance is zeroed before the statement date. But even if some or all cards report, FICO doesn't care. I recently got "There are no recent balances on your revolving credit accounts. Your FICO score was hurt because you are not currently demonstrating active revolving credit management." Yet every single of my credit cards is used every month, lol.

[Anonymous]

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@Anonymous wrote:
If I'm always paying off my balance in full and therefore reporting a $0 balance, does that ever eventually report as inactivity?

How long can you not use a card before it gets reported as "inactive"?

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Try leaving 10-15% of your charges unpaid at the due date and statement closing date. If you are paying in full before you have a payment due nothing but 0 will show on your bureaus. Get billed for the 10-15%, then pay in full.

The creditors know you are charging and paying so there is no inactivity, but you are not showing any high and low balances on paper.

[Erusidhion]

    Out of extensive research provided by Bob Wang over at Credit Boards, you want at least a $2.00 balance to report on one of your cards (cannot be a Discover because their minimum is $3.00 to report) and the rest 0 to maximize your FICO score if you have clean reports. Letting all your cards report a $0 balance actually does hurt your score and it is a different amount for everyone. It's common knowledge over there and it's been brought here in numerous posts.

   Also you want at least 3 credit card accounts I believe to be on your credit reports to maximize it even more. It's pretty much gaming the way FICO is setup. You would assume that all $0 balance would give you the best score though and it should but that's just not the way it works; for now.

[Anonymous]

Leave $1.99 on a Discover. Profit.