Question about AZEO method

[Anonymous]

I just want to make sure we use AZEO correctly: My husband has three cc’s. So he needs to keep the balance zero on two cards. The third cc should have a small balance of about 1% utilization. For the two cards with a zero balance, should he be using them so they remain active but just make sure those balances are zero by statement close? Or should he NOT use them at all and just let them rest at zero without any usage? I’ve read that not using a cc in 90 days is bad for scores. Thank you.

[Anonymous]

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@Anonymouswrote:
I just want to make sure we use AZEO correctly: My husband has three cc’s. So he needs to keep the balance zero on two cards. The third cc should have a small balance of about 1% utilization. For the two cards with a zero balance, should he be using them so they remain active but just make sure those balances are zero by statement close? Or should he NOT use them at all and just let them rest at zero without any usage? I’ve read that not using a cc in 90 days is bad for scores. Thank you.

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As long as they report 0% utilization to the CRAs, that's good.  So, I use my cards throughout the month, and then before the statement cuts, I pay them down to the desired utilization.

Not using a card is not bad for scores.  That's not a true statement!

Good luck!!

[thornback]

You can absolutely use the two zero cards as you would normally throughout the month -  you just make sure to pay them to zero before the statement cut date so they report a zero balance. 

Note:  if you have to pay them a 3-5 days before the statement cuts to make sure the payment posts in time, you can't use the cards til the day after the statement cuts so not to accrue any new charges in that short period of time.  But many lenders post payments immediately - if your lenders do this, you don't have to pay nearly a week in advance - a day or two before is fine.   

Also - not using the card for 90+ days is not bad for your scores - but the lender may not like it too much which may result in a credit line decrease. 

[Anonymous]

Guess I was confused... I thought not using a card in several months (3 months) would cause a score decrease. So I think to play it safe, my husband should use the other two zero cards at least minimally. I prefer he not use those two at all but I’m not sure iof the effect. He’s trying hard to get his score up to 620 so we can get preapproval for a home asap

[Anonymous]

Good luck with your future home purchase!!

[thornback]

There's just no solid evidence of inactivity of an open card in good standing, in and of itself, having a negative effect on FICO.

However, should the lender take adverse action (CLD or account closing) due to prolonged inactivity, that could certainly have an affect.

Caveat: Few people have reported a temporary score ding after having a previously inactive card (6 months or more) suddenly report a balance.

Bottom line, use each card for at least one purchase every 2-3 months to keep the lenders satisfied.

[Anonymous]

As everyone else stated, use cards as you normally would. Make sure you pay down balance before statement is issued. Look at your previous statements to see what the dates are that they close out each month. I've heard of some creditors closing out accounts when consumer has not used the card for a while. Just put small stupid charges if you need to on each card or alternate each month just to keep it active.