Reply
Regular Contributor
Posts: 163
Registered: ‎06-18-2007
0

So much for using CC with $0 balance to help your credit score

[ Edited ]
I have had a $0 balance for a BofA CC for about 4 months so I decided to use it. I charged $107 dollars on it which has a $4,000 CL. I haven't gotten my statement yet which I intend to pay in full. But I get a credit watch alert lowering my credit score 1 point. I only wanted to use the BofA just to keep it active. I am sure within the NEXT 60 DAYS EQX will give me my point back but it proved to me that having a balance between 1-9% is better than $0 balance is a bunch of hooey. I have paid Chase off Sept 1, 2008 and they send statements out on the Oct 6th and EQX hasn't adjusted my credit score for paying them off. I am sick of EQ to be quick to lower credit scores by slow as snails in raising them.
Message Edited by Madison on 10-07-2008 10:06 AM
Valued Contributor
Posts: 1,424
Registered: ‎07-24-2007
0

Re: So much for using CC with $0 balance to help your credit score

Some folks get dinged for going to 9%. 1-3% is best for some.

 

 

New York Yankees - 2009 World Series Champions. 27... and counting.....
Regular Contributor
Posts: 104
Registered: ‎09-21-2008
0

Re: So much for using CC with $0 balance to help your credit score


Madison wrote:
I have had a $0 balance for a BofA CC for about 4 months so I decided to use it. I charged $107 dollars on it which has a $4,000 balance. I haven't gotten my statement yet which I intend to pay in full. But I get a credit watch alert lowering my credit score 1 point. I only wanted to use the BofA just to keep it active. I am sure within the NEXT 60 DAYS EQX will give me my point back but it proved to me that having a balance between 1-9% is better than $0 balance is a bunch of hooey. I have paid Chase off Sept 1, 2008 and they send statements out on the Oct 6th and EQX hasn't adjusted my credit score for paying them off. I am sick of EQ to be quick to lower credit scores by slow as snails in raising them.

 
A single point drop is so minimal it'd likely be hard to pinpoint the cause.
If the statement hasn't posted yet this charge wouldn't yet be affecting your reports or scores, so the 1-point drop is likely unrelated.
The main reason to use the card occassionally should be to prevent the company from closing the card due to inactivity, not necessarily for a FICO score boost.
Regular Contributor
Posts: 163
Registered: ‎06-18-2007
0

Re: So much for using CC with $0 balance to help your credit score

When I got my credit alert, it referenced the BofA CC and the charge of $107. That was the reason.
Established Contributor
Posts: 513
Registered: ‎04-03-2007
0

Not really "hooey" ;)

[ Edited ]

Madison wrote:


I charged $107 dollars on it which has a $4,000 CL.

....... it proved to me that having a balance between 1-9% is better than $0 balance is a bunch of hooey.


 

 The advice is not complete "hooey". Most people when giving that advice just don't realize that there is a minimum, which might exceed 1% which must report or there could be a ding of up to 4 or 6 points.

 

I discovered that anomaly when playing with the FICO simulator years ago. I subsequently did some experiments with my own actual balances and reports. Having at least a minimum of $150 balance (on only one CC) worked best for me. Furthermore having a maximum of 7% individual card utilization seemed to work best for me.    YMMV 

 

 Notice that your balance was only $107. If it really matters to you, you could try having a closing balance of at least $150 on only one card, with $0 balances on he others. See if you gain some points. If not you could try $200 the next month to see if that works. You will definitely gain some points when you determine your own "minimum" reported balance.

 

Message Edited by CreditAble on 10-07-2008 07:06 PM
Established Contributor
Posts: 513
Registered: ‎04-03-2007
0

Re: So much for using CC with $0 balance to help your credit score

[ Edited ]

Madison wrote:
When I got my credit alert, it referenced the BofA CC and the charge of $107. That was the reason.

 

 What was actually stated?

 

 I had assumed that you had $0 balances reporting on other cards. If you have balances reporting on other cards that could cause a score drop.  

 

Message Edited by CreditAble on 10-07-2008 06:48 PM
Established Member
Posts: 26
Registered: ‎09-05-2008
0

Re: So much for using CC with $0 balance to help your credit score

huh? I can only wish for a 1 point drop.
Valued Contributor
Posts: 1,060
Registered: ‎02-13-2008
0

Re: So much for using CC with $0 balance to help your credit score

[ Edited ]
The hit was for using a "dormant" card. Report 1% every month on the same card (and the only card) this is where you see the increase....(I saw 20-25 points)
Message Edited by 1111mel on 10-09-2008 10:46 PM
Mortgage Lenders Mid-Score 778 I AM A HOMEOWNER!!!!! 30 Year 5% Fixed Rate, closed on 3/18/09
Advertiser Disclosure: The listings that appear on myFICO are from companies from which myFICO receives compensation, which may impact how and where products appear on myFICO (including, for example, the order in which they appear). myFICO does not review or include all companies or all available products.

Copyright ©2001-2015 Fair Isaac Corporation. All rights reserved.   | Terms of Use | Privacy Policy | Sitemap

IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions. Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more

FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.