0% utilization bad??

[Anonymous]

Can we just clarify one thing with the 1-9% trick.  There is no reason to micromanage every aspect of your score if you do not have any applications in the horizon.  Utilization is a fluid number.  All else being the same, you can let every card report 70% utilization for a year, when you pay it off, your scores should reflect the same as if you had been reporting 0% every month.  

[Anonymous]

i just paid down from 32%to 0.01% and jumped 39pts from 742 to 781 in EQ.  

[erin62777]

Well, I transferred a balance to my WF card. I lost 25 points across the board on all 3 agencies. The other cards reported to 0 and I paid off an additional 2k of the 7k that was transferred. I gained back 4 points and that was on 1 report, 2 points on another and 0 on lovely equifax!

Seriously, I swear you cannot win.....

[lhcole77]

---

@Anonymous wrote:

Can we just clarify one thing with the 1-9% trick.  There is no reason to micromanage every aspect of your score if you do not have any applications in the horizon.  Utilization is a fluid number.  All else being the same, you can let every card report 70% utilization for a year, when you pay it off, your scores should reflect the same as if you had been reporting 0% every month.  

---

Agreed on the micromanaging aspect. But according to some Senior Contributors on here and information they have provided, though FICO scores do not have memory with regards to utilization, they do take account time with regards to reporting high numbers.

So if you were at 1% UTL for a year, then went up to 70% on all cards for a year, and then went back down to 1%, you may not regain ALL lost points in one swoop. According to them it would take some time of repeated reports of super low UTL to regain lost points.

(I hope I articulated that well)

[Blodreina]

---

@Anonymous wrote:

Can we just clarify one thing with the 1-9% trick.  There is no reason to micromanage every aspect of your score if you do not have any applications in the horizon.  Utilization is a fluid number.  All else being the same, you can let every card report 70% utilization for a year, when you pay it off, your scores should reflect the same as if you had been reporting 0% every month.  

---

While true, I think there is a potential concern if accounts consistently report high utilization.  Yes, the FICO score has no memory; however, your other creditors only have the reported balance as an indication of your other accounts.  Thus, if multiple accounts consistently report high utilization, it could cause an issue with your creditors that do not issue that card - as they only have access to data from they cards they gave you and whatever is on your credit report.

For example, let's say I have 4 cards.

Amex (86% util reported)

Barclay (77% util reported)

Capital One (70% util reported)

Chase (the lender of interest)

If my Amex, Barclay, and Capital One accounts always report high utilization, Chase may consider that high risk behavior over time.  If a particular card (or cards) regularly get heavy use and you always pay in full after the statement date, how would Chase know?  Likewise, in this example, rotate whoever the lender is and assume the other cards report high utilization:  same situation.  Hopefully that makes sense.  I had this realization recently; though it's only relevant for those who regularly have heavy usage on their cards.  The question is whether there's something on reports to indicate that the reported balance is a new balance some kind of way; I don't think there is.