Valued Contributor
Posts: 2,691
Registered: ‎07-29-2009
Re: Having Zero Debt Lowers Your Score by 7 points.

pizzadude wrote:


This is clearly a YMMV situation, but in general with revolving credit, carrying a very small balance on one of your credit cards might give a slight FICO score boost.


Carrying a small balance demonstrates active ( and presumably responsible ) use of your revolving credit least that's my interpretation of how FICO might look at it.

I agree with this assumption. A FICO score is not meant to show how much a person does or does not owe. Some individuals with excellent credit scores have tons of debt...on purpose. That is how they grow financially. Your FICO score is meant to show how they have handled that debt.


That the OP...I understand your frustration. I've been through it as well...where I see my score drop a couple of points because I paid everything off prior to the statement date. (I checked, and last time I showed all zero cc balances my score also went down 7 points.) That is normally not a problem for me because we have several cc's that we use, as well as several AUs on our cards...and some small charge usually manages to squeak through at the last minute. Nothing to worry about unless you are actively trying to squeeze out every FICO point for a new application.