Zero balance Reported=Point drop?? So confused

[erinm1083]

My ch 7 bankruptcy was discharged on 5/19/16. Since then I have cleaned up my credit report so that everything shows as closed IIB, zero balance. I was approved for a Capital One QS with a $300 CL in the end of May. My scores increased 40-70 points across all three bureaus when the first statement reported a $28 balance (9% utilization)  In the beginning of this month, I was approved for a Merrick Bank Visa with a $550cl. They reported the account when it was opened. Because of the "annual fee" a balance of $75 was reported. This brought my total utilization to 12ish%. My scores increased another 25-30 points. I paid off my Capital One account before the second statement cut so a zero balance was reported. Then my score dropped 15 points. My total utilization is now 8ish%. Should I have let a small balance report? Any thoughts?

[0REDSOX7]

This may be advice that many here would frown upon - but at this point, just use your cards, let them cycle and pay them off each month.  Yes, your score will fluctuate a little here or there based on balances reported and AAoA, but at this point, just garden, use the cards you have and focus on buidling a robust profile.  The score will come with a good profile - but that is just my $0.02 as again, many of those here are very "detailed" with their rebuild...

[Anonymous]

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@0REDSOX7 wrote:

This may be advice that many here would frown upon - but at this point, just use your cards, let them cycle and pay them off each month.  Yes, your score will fluctuate a little here or there based on balances reported and AAoA, but at this point, just garden, use the cards you have and focus on buidling a robust profile.  The score will come with a good profile - but that is just my $0.02 as again, many of those here are very "detailed" with their rebuild...

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+1

This is sound advice - you're probably not going to want to apply for anything else for a few months at this point anyway.  keep a little usage on each card, pay them off to avoid interest and relax.  you only need to maximize your score when you're getting ready to apply.

(Edit)

I re-read and saw one of the cards was from Cap One - that changes my advice a little bit, because in addition to the advice above, you really want to show a lot of usage internally to qualify for credit line increases. So for the Cap One card ONLY, advice is to literally spend the hell out of the thing each month, paying it off multiple times per month if you have to, and only letting it report <9% at the end of the billing cycle.  After 2-3 months follow the advice below as if you were applying for a new card (leaving the $10 on the Cap One card), and request a line increase - I'd be surprised if your line did not at least double.

when you DO get ready to apply, here is the optimal formula:

1. pay all cards except one to $0

2. leave $10 reporting on a single card

That's it.  To be sure all balances are reporting this way, know at least 30 days ahead of time when you are going to apply for new credit.

[Anonymous]

What's the reason you leave $10 on one card?

[Anonymous]

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@Anonymous wrote:

What's the reason you leave $10 on one card?

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to avoid the aforementioned score drop - 0% total utilization can be as bad or worse than 40% or 50% utilization, at least according to the scoring algorithm

[Scupra]

To optimize your FICO you need at least 3 revolving TL's. You also want 1 card to report less than 10% util while all others report $0. FICO has no memory and once your utilization is back in check you will rebound.

Like said, playing the util game can get stressful and tiring though. I only worry about it when I am preparing to app for something.

[Anonymous]

My personal experience is this......I had $0 owed on my cards. I used one of my cards and paid it off a week later. Much to my surprise, the statement didn't cut, but they reported a $21 balance on one card and a $40 balance on another. I was pissed. A week later my EQ FICO8 score went up 69 points. Yes, 69 points. EX went up 17 points and TU up 33 points. Just my experience with my credit profile. What some people don't understand is when you have 0% utilization the cards (some, not all) don't have anything to update. You look stagnant. FICO warns me of no revolving credit can be damaging. Good luck to you ans experiment with your profile. They and we are all very different.

Good Luck!!