Is having zero balance on credit cards bad????

[Anonymous]

I have one Lowe's Consumer card that has a zero balance and I'm about to pay off my Target bill. I also have a care credit that is using about 78% and 3 capital one cards that are 50%, 50% and about 80% utililization. Are the zero balances on my Lowes and Target going to look bad??? I'm trying to boost my score so I can buy a home at the end of the year.

[GoldSorata]

Actually since you have multiple cards with balances, it should help your score to zero out some cards. It's generally said to maximize fico you only want a small balance (under 10% on one card only).

[MarineVietVet]

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@Anonymous wrote:

I have one Lowe's Consumer card that has a zero balance and I'm about to pay off my Target bill. I also have a care credit that is using about 78% and 3 capital one cards that are 50%, 50% and about 80% utililization. Are the zero balances on my Lowes and Target going to look bad??? I'm trying to boost my score so I can buy a home at the end of the year.

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The fewer zero balances you have the better it is actually.

Everyone's situation is different and there is no one size fits all approach to this and therefore no "ideal" number but what seems to work well for many people is to have only one of their cards report a small (9% or less of it's credit limit) balance each month and then pay in full before the due date. You can use it as much as you want during the month but what's important is the reported balance because for most cards whatever is reported on the monthly statement is what is used to calculate utilization for the month.

You might have to play around with the percentages for a few months to see what works best for you. Some people say that 1-3% utilization helps the most. For others it might be 5-9%. As I said it's not one size fits all.

On any other cards always try and have them report a zero balance each month. That doesn't mean you can't use them just make sure that the desired zero balance on these accounts is achieved several days before their statements post.

Along with individual and overall utilization, FICO also scores the number of all types of accounts reporting a balance.at any one time Making sure less than half of all your accounts report a balance helps most people.

Now this approach really isn't necessary if you're not looking to apply for any credit in the near future or unless you are trying to tweak your score for maximum effect but some folks do this as a hobby just to see how high they can get their score.

I do this as a hobby and it's become second nature.

[StartingOver10]

The more zero balances the better - except don't have all zero cc balances report. Have one report a small balance between 1% and 9%.

MarineVietVet says it best here (copied below for you):

You might have to play around with the percentages for a few months to see what works best for you. Some people say that 1-3% utilization helps the most. For others it might be 5-9%. As I said it's not one size fits all.

On any other cards always try and have them report a zero balance each month. That doesn't mean you can't use them just make sure that the desired zero balance on these accounts is achieved several days before their statements post.

Along with individual and overall utilization, FICO also scores the number of all types of accounts reporting a balance.at any one time Making sure less than half of all your accounts report a balance helps most people.

Now this approach really isn't necessary if you're not looking to apply for any credit in the near future or unless you are trying to tweak your score for maximum effect but some folks do this as a hobby just to see how high they can get their score.

[MarineVietVet]

Oh good grief!! I just realized why getting in a hurry and not proof reading are both bad.

I should have said the MORE zero balances you have the better it is. Except for all zero balances reporting.

My sincere apologies.

[Anonymous]

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@MarineVietVet wrote:
Oh good grief!! I just realized why getting in a hurry and not proof reading are both bad.

I should have said the MORE zero balances you have the better it is. Except for all zero balances reporting.

My sincere apologies.

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+1, honesty is a marines best quality, hats off to you sir.