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Established Member
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Registered: ‎01-24-2009
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Does paying your credit card down to a zero balance hurt your credit score?

[ Edited ]

Does anybody know if you payoff your credit card balance down to zero does that affect your credit negatively?  I'll use my credit card and pay off the whole outstanding balance entirely. I read on this board from someone that you should leave 1-5% util on your card and pay the rest of it off before your due date to increase your score? Anyone have any input on this.

 

Thanks 

Message Edited by Keepmovingscoreup on 01-25-2009 12:06 AM
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Registered: ‎03-15-2008
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Re: Does paying your credit card down to a zero balance hurt your credit score?

[ Edited ]

Keepmovingscoreup wrote:

Does anybody know if you payoff your credit card balance down to zero does that affect your credit negatively?  I'll use my credit card and pay off the whole outstanding balance entirely. I read on this board from someone that you should leave 1-5% util on your card and pay the rest of it off before your due date to increase your score? Anyone have any input on this.

 

Thanks 

Message Edited by Keepmovingscoreup on 01-25-2009 12:06 AM

I have never had all my credit cards down to zero, but I have heard form others that when every credit card they have reports at 0 they have seen their scores go down.  I believe Haulingthescoreup has something listed in the signature showing how her(?) scores went down when every card reported at zero.  What you want is for less then half of your tradelines to report a balance, and the balance you want is to be somewhere over 0% but less than 10%, and then pay the remainder off before the due date so you won't be charged interest.

Message Edited by woopah on 01-25-2009 04:56 AM
4/16/09: TU: 775, EQ: 805
2/11/09: TU: 773, EQ: 790, EX:790
11/16/08: TU: 773, EQ: 785, EX: 780
Goals for 2009: 0 Credit Card Debt & 0% Util (achieved 2/6/09), Mortgage! (achieved 11/2/09), getting closer to 800 scores (I crossed this earlier this year, but I'm sure I'm not there anymore!)
Established Contributor
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Re: Does paying your credit card down to a zero balance hurt your credit score?

I've always heard that as well.  My personal philosophy is to pay the entire balance before the statements are cut.  Yes they get reported with a $0 balance, but I honestly don't see much fluctuation with my scores.  I would also think the reverse would hold true as well but when I leave a small balance I don't see a point jump.

 

I just like being assured that I'm not going to pay any interest, that to me is more important than a point or two here and there.  And God help you if you are ever like 3 sec late they will jack you to the sky with APR, backdate all non promotional interest. I try to keep that from happening.

 

Just my experiences, I'm sure someone else has had a completely different move while working the same principals. 

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Registered: ‎03-12-2008
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Re: Does paying your credit card down to a zero balance hurt your credit score?

I belive if all your accounts reports as having a $0 balance, FICO sees it as you not managing your available credit and deducts some points.  I'm not quite sure how many though.
As of Jan 2009: EX - 659 EQ - 666 TU - 681

As of 2/13/09: EX - 648 (My last EX Fico)
Established Contributor
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Registered: ‎05-14-2008

Re: Does paying your credit card down to a zero balance hurt your credit score?

Given the choice of zero balances and a slightly lower FICO vs. carrying balances with a bump, I'll take the zero balance option.  Isn't that the whole idea of finance, not to owe money?  I think we obsess too much on the FICO score and lose sight of the real goal.
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Re: Does paying your credit card down to a zero balance hurt your credit score?

I agree. Money > Fico. The points only matter if they are the difference between 'mortgage apr' rates.
Established Member
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Registered: ‎01-24-2009
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Re: Does paying your credit card down to a zero balance hurt your credit score?

Thanks everybody for your input. Now I don't feel so bad that my util is at 0%. I just wanted to hear everyone personal feelings about this.

 

Does anybody know if you payoff your statement and bring your cc account to a zero balance and then charge something on the card before the due date will it show it show up on your credit report?

 

Thanks  

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Posts: 1,998
Registered: ‎03-31-2008
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Re: Does paying your credit card down to a zero balance hurt your credit score?

[ Edited ]

Watchmann wrote:
I think we obsess too much on the FICO score and lose sight of the real goal.

So true.

 

 

I stop worrying about my fico score a long time ago. I may have to carry a big balance for a few months but i will try my best not to carry the balance for a long period of time also if i make my payments on time every month i'm all good in my book.

Message Edited by mjbfan79 on 01-25-2009 12:02 PM

Starting Score 3-31-08: EQ 582 TU 577 EX 625
Current Score 3-19-10: EQ 703 TU 712 EX No Clue
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Established Contributor
Posts: 736
Registered: ‎08-25-2008
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Re: Does paying your credit card down to a zero balance hurt your credit score?

Does anybody know if you payoff your statement and bring your cc account to a zero balance and then charge something on the card before the due date will it show it show up on your credit report?

 

What his your credit reports is the outstanding balance on the 1 day of the month that they report to the CRBs.  Not necessarly the statement date.  Just watching it a bit you can almost narrow the exact time within a day or so of when they will post.

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Registered: ‎07-17-2007

Re: Does paying your credit card down to a zero balance hurt your credit score?


Watchmann wrote:
Given the choice of zero balances and a slightly lower FICO vs. carrying balances with a bump, I'll take the zero balance option. Isn't that the whole idea of finance, not to owe money?

True, but you don't have to carry a balance (and pay interest) to report a balance. Just don't PIF before the statement cuts, pay after. Do this on a card with either a high CL or one you don't use much to keep >10% util and you're golden.

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