topic Re: $0 Balance causes score to drop in Understanding FICO® Scoring

$0 Balance causes score to drop

Anonymous — Mon, 19 Mar 2018 13:29:53 GMT

Transuninon and Experian are so unpredictable. I get punished by huge score drops when balances on credit cards report $0 Balance. What am I doing wrong??

Re: $0 Balance causes score to drop

Anonymous — Mon, 19 Mar 2018 13:41:03 GMT

It's normal to see a score drop if all your credit cards are reporting zero balance. This is a FICO score penalty for not having any revolving balance reported.

Re: $0 Balance causes score to drop

jl4 — Mon, 19 Mar 2018 14:12:54 GMT

Exactly. A total $0 balance effectively shows that you don’t use them... we know that’s inaccurate in most cases, especially for PIFs, but unless reporting happened daily and the models changed, it’ll just have to exist like that.

Re: $0 Balance causes score to drop

Anonymous — Mon, 19 Mar 2018 14:14:45 GMT

@Anonymouswrote:
It's normal to see a score drop if all your credit cards are reporting zero balance. This is a FICO score penalty for not having any revolving balance reported.

Absolutely right. The CB's need to see card use to score you. Leave a small balance for your next cycle and my best guess is you will see a big jump in your scores. Best of luck to you.

Re: $0 Balance causes score to drop

jl4 — Mon, 19 Mar 2018 15:12:02 GMT

@Anonymouswrote:
@Anonymouswrote:
It's normal to see a score drop if all your credit cards are reporting zero balance. This is a FICO score penalty for not having any revolving balance reported.
Absolutely right. The CB's need to see card use to score you. Leave a small balance for your next cycle and my best guess is you will see a big jump in your scores. Best of luck to you.

Even if it's just enough to be 1%. At 10K, that's but $100. Interest 24.99% APR on $100 is $24.99 a year. Worth it, IMO.

Re: $0 Balance causes score to drop

601flyguy — Mon, 19 Mar 2018 15:23:31 GMT

You dont have to pay interest, just let a balance report on one of your cards. All zero except one

Re: $0 Balance causes score to drop

HeavenOhio — Mon, 19 Mar 2018 16:35:01 GMT

$5 is enough. 0.000001% will round up to 1%.

If you're below $5, you risk a small balance adjustment. That's when the bank forgives your balance rather than bothering to bill you. When that happens, a zero balance is reported.

And just to reiterate, you don't have to pay interest to do this. Your positive balance can come from new charges made during the current statement period.

Re: $0 Balance causes score to drop

jl4 — Mon, 19 Mar 2018 16:40:23 GMT

Yes, don’t listen to me. I hadn’t had coffee yet and my brain wasn’t on. 🙊

Re: $0 Balance causes score to drop

Anonymous — Mon, 19 Mar 2018 19:18:28 GMT

@jl4wrote:
@Anonymouswrote:
@Anonymouswrote:
It's normal to see a score drop if all your credit cards are reporting zero balance. This is a FICO score penalty for not having any revolving balance reported.
Absolutely right. The CB's need to see card use to score you. Leave a small balance for your next cycle and my best guess is you will see a big jump in your scores. Best of luck to you.
Even if it's just enough to be 1%. At 10K, that's but $100. Interest 24.99% APR on $100 is $24.99 a year. Worth it, IMO.

What?? You dont run an interest bearing balance, just dont pay before the statement and allow a statement balance to post. Never run balances and pay interest on credit cards.