@jeff8202 wrote:I read somewhere that when you don't use cards then it has a negative effect on your credit score. So I was wondering how this is tracked. If I have 6 credit cards and I use each of them every now and then and pay them off in full at the end of each month, does the score take in account for the credit card use?
I suspect it's the last update / activity date which is tracked in the data. If a lender doesn't report anything for six months (anecdotally this seems to be the boundary) then the tradeline may be flagged as inactive and some of the positive benefits of it (credit limit on revolving utilization being the key one seen so far) are excluded from the FICO calculation.
Payment history apparently is still in effect both positive and negative. Mix of credit might not be, hard to say.
I have a lender (GE Capital) who unless I have a balance, doesn't generate a statement; if they don't generate a statement, they don't report to the bureaus. As such every few months I have to let a balance report. I generally have a bunch of my tradelines at $0, but I look at a credit report and see when the last time they updated is... fortunately this occurrence is becoming more and more rare and now there's more data being reported (use / payments) in addition to the statement balance so I suspect future versions of the algorithm may be able to do away with this particular flag if they so desire.
ETA: what you might also be referring to, if you report all $0 across the board, there is a negative associated with that as well. Let at least one card report a balance, generally people find that only letting one card report a balance between 1-9% of that tradeline is close to optimal from a scoring perspective.
@jeff8202 wrote:Thanks, I got my score up to around 815 - 830 (reported by discover fico, not sure what model) within recent months. It's dangling there, I want to keep it up there for a bit to get a loan soon for a investment property I'll pay more attention to the dates items are reported as that's something I never thought of. I also plan on ensuring that I make some kind of transactions on these cards to keep these dates new. Thank you for your advice.
Jeff
The Discover FICO is a Transunion '08 score: it won't show up on the investment property loan, but if anyone at that level is obviously doing close to everything right. I wouldn't worry about it honestly and just keep doing what your doing but be aware of the issues if you take an unexpected dip and to make certain your balances and most recent activity date are copasetic and correct them for the following month if not.