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Is zero balance good for score

Regular Contributor

Re: Is zero balance good for score

For this, you do not need to pay 30$/month. Just use the free Fico8 score report services from CC to monitor monthly the numeric values of Fico8. Use CreditKarma or other tools for free or for a small monthly fee to monitor credit reports and inquiries to cover all three EX, TU, EQ.


Current:::::::::::::EX8=740, EQ8=740, TU8=760.
12 month goal: EX8=800, EQ8=800, TU8=800.
AMEX BCE, AMEX PRG, AMEX HH, BOA CR, BOA Better CR, BOA PR, BOA TR, Chase AMZ, Chase Freedom, Discover CR, Uber, Walmart/Synchrony.
Message 11 of 20
Established Member

Re: Is zero balance good for score

Sounds good. I can cancel before end of month if.

Message 12 of 20
Valued Contributor

Re: Is zero balance good for score


xenon3030 wrote:

Yep. For example AMEX Gold card.


OK, that makes more sense. Smiley Happy I did a double take when you said that balances on "rewards" cards didn't count toward utilization as most revolving cards offer some kind of rewards.

 

With Credit Karma, you need to ignore the scores and account ages. It's great for monitoring reports, though. The bugaboo is getting a FICO8 based on Equifax. TU and EX FICO8s are fairly widely available. You can get all three by periodically signing up for $1 trials at CreditCheck Total and canceling before the trial period ends.

Message 13 of 20
Valued Member

Re: Is zero balance good for score

Hi! I think I just read, re-read and over read too many posts on here and now I'm very confused. According to the

Veni, Vidi, Vinci, Visa or How to Master Your MasterCard

board keeping cards at zero balance every month will not help scores Smiley Surprised ?

However, after reading further in that post and this one I've seen two very diferent answers. One person stated keep below 10% balances on less than half your cards and scores should rise; however someone else says nope keep 1 card at lower than 10% monthly or if one card is high utilization then keep all others under 5% Smiley Surprised?

 Idk what to do. I am currently rebuilding and had about $2.5K to put towards cards this month, but I think i may have dispursed it wrong amongst my cards. I currently now have 13 TLs with only 10 reporting ; last 3 just got end of August and should show up by end of this month. Out of all 13 only 3 will still have a balance by the 30th of this month. 2 of them do have high utilization (66% & 53%), the other one is at 15%.Tthe 66% has already reported and updated for this month (it was at 78%util), the other 2 will not report until after the 28th. Should I just continue to pay on these 2 cards to get under 30% and continue to PIF before statement cuts on all the rest like I have been doing to see the maximum jump? I am trying to raise my scores to at least 675 by end of January because I am moving and hate paying extra deposits Smiley Sad because my scores are so low. Any advice is appreciated Smiley Happy

6/17:TU645 EQ616 EX623
9/17: TU662 EQ628 EX651
1st Goal Score: 675 x3 by 1/2018
*Rebuilding since May*
Message 14 of 20
Regular Contributor

Re: Is zero balance good for score

@dan

 

Your situation it's a bit murky, but i think this will help. So make sure each month more than 1/2 report zero. So in your case i think at least 7 need to report zero. At the same time, get the two hi utilization cards down. First, to 48.9% each, then all cards below 28.9% utilization. You can see how you are doing along the way, but from where you are this would be my move. Happy trails, higher scores ahead!


Current Score: EQ753 TU769 EX778
Goal Score: 800's once again


Note to self: Garden. Must garden till 3rd Qtr, 2018
Message 15 of 20
Community Leader
Senior Contributor

Re: Is zero balance good for score

I think I can simplify it even further.  Here's your rule for the next few months:

 

Pay off all of your credit card debt.

 

The exact route you take is up to you.  But just get it all paid off.  As you get closer to having it all paid off, then you get to the finer details, which is to have:

 

All cards reporting $0 except one

     with the remaining card reporting a small positive balance (like $15 say)

 

As far as the exact route you take to the payoff, I personally like the idea of you getting all cards that may have a high utilization paid down first.  Thus getting all your cards at under 48% as soon as you can.  But I am not sure this matters much, since you'll end up with the same score once you get it all paid off.

Message 16 of 20
Valued Contributor

Re: Is zero balance good for score


DanitheRebuilder wrote:

Hi! I think I just read, re-read and over read too many posts on here and now I'm very confused. According to the

Veni, Vidi, Vinci, Visa or How to Master Your MasterCard

board keeping cards at zero balance every month will not help scores Smiley Surprised ?

However, after reading further in that post and this one I've seen two very diferent answers. One person stated keep below 10% balances on less than half your cards and scores should rise; however someone else says nope keep 1 card at lower than 10% monthly or if one card is high utilization then keep all others under 5% Smiley Surprised?

 Idk what to do. I am currently rebuilding and had about $2.5K to put towards cards this month, but I think i may have dispursed it wrong amongst my cards. I currently now have 13 TLs with only 10 reporting ; last 3 just got end of August and should show up by end of this month. Out of all 13 only 3 will still have a balance by the 30th of this month. 2 of them do have high utilization (66% & 53%), the other one is at 15%.Tthe 66% has already reported and updated for this month (it was at 78%util), the other 2 will not report until after the 28th. Should I just continue to pay on these 2 cards to get under 30% and continue to PIF before statement cuts on all the rest like I have been doing to see the maximum jump? I am trying to raise my scores to at least 675 by end of January because I am moving and hate paying extra deposits Smiley Sad because my scores are so low. Any advice is appreciated Smiley Happy


Here are some comments regarding credit cards and Fico 8 scores:

 

Fico algorithms look at three factore regarding credit card utilization:

1) Aggregate utilization for all open CC accounts combined = (sum total of open balances/(sum total of credit limits). This is THE most important factor. For best score aggregate utilization needs to be less than 9% - not less than 10%..

2) Number or % of open accounts reporting a positive balance. To avoid and significant drop in score, # accounts reporting balances should be kept below 50% but above 0%. Some take that a step further and advise allowing only one card to report a balance "to be safe" If you have a lot of cards, no real need to manage to that level.

3) Individual card utilization also is looked at - it is the highest % utilization on any cards that report that counts. For best results keep the highest reported utilization on your cards under 29% - yes under 29% not under 30%. Some will advise card utilization should be held to less than 9% but, that is another "to be safe" and data does not support this ultra low card utilization requirement.

 

You can't go wrong with allowing only one card to report a small balance. However, managing to that level can be difficult and for many profiles is non value add. My primary focus is keeping aggregate utilization well below 9% - I strive to always stay under 6%. 

 

It is important to note that # cards reporting balances and utilization are only point in time impact on score. Utilization in past months won't influence current month scores - only current utilization. So, no need to stress if things get a little out of hand in a given month.

 

Key is to avoid a late payment as those do have a lingering impact on score and drive down aggregate utilization to well below 9%.

Fico 8: .......EQ 850 TU 850 EX 850 (3/2017)
Fico 9: .......EQ 850 TU 850 EX 850 (3/2017)
Fico 4 .....:. EQ 804 TU 823 EX 830 (3/2017) EX Fico 98: 839 (3/2017)
VS 3.0:...... EQ 832 TU 832 EX 832 (3/2017)
Fico 8 BC:. EQ 887 TU 899 EX 900 (3/2017)
CBIS: ........EQ LN Auto 940 EQ LN Home 870 TU Auto 902 TU Home 950 (4/2017)
Message 17 of 20
Valued Member

Re: Is zero balance good for score

THANK YOU all for that advice. I get it. So i'm pay both cards down and try to get below 30% at least by December (new goal to reach!) and then pay one off and opnly have 1 reporting under 9%. My last account reports the 29th of the month and by then my overall utilization will be 29% so I will continue to work. I have found so much helpful information on here. Thank you all again!

6/17:TU645 EQ616 EX623
9/17: TU662 EQ628 EX651
1st Goal Score: 675 x3 by 1/2018
*Rebuilding since May*
Message 18 of 20
Community Leader
Senior Contributor

Re: Is zero balance good for score


DanitheRebuilder wrote:

THANK YOU all for that advice. I get it. So i'm pay both cards down and try to get below 30% at least by December (new goal to reach!) and then pay one off and opnly have 1 reporting under 9%. My last account reports the 29th of the month and by then my overall utilization will be 29% so I will continue to work. I have found so much helpful information on here. Thank you all again!


Best of luck for the future!

 

One last thing to bear in mind.  FICO rounds all percentage points UP.  And so, when people say that there is a scoring breakpoint at 29%, they are actually urging you to get your utilization below 28.99% .  If your utilization ends up being just a buck or two more (like 29.03%)  then FICO will round that up to 30%.  Which will give you an additional scoring hit.

Message 19 of 20
New Member

Re: Is zero balance good for score

 
Message 20 of 20