Zero balance on my credit card this month, is it bad for my credit score?

[Anonymous]

With the intention of only showing 1% utilization, I've been paying my credit card everytime I use it. Unfortunately, it seems that some charges, even if decreasing my available credit, haven't been post as fast as my payments have. This means that, by the time they report (one or two days after my cut-off date), I will have a 0 or minus something balance. Is this bad for my credit score?

Cheers

[creditwherecreditisdue]

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latindane wrote:

With the intention of only showing 1% utilization, I've been paying my credit card everytime I use it. Unfortunately, it seems that some charges, even if decreasing my available credit, haven't been post as fast as my payments have. This means that, by the time they report (one or two days after my cut-off date), I will have a 0 or minus something balance. Is this bad for my credit score?

Cheers

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Credit balances report as zeroes. Having all your accounts report zero is, in general, not optimal, but not terrible. At most it could cost you a few points. Nothing really to worry about and easy to remedy next month.

[MarineVietVet]

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@Anonymous wrote:

With the intention of only showing 1% utilization, I've been paying my credit card everytime I use it. Unfortunately, it seems that some charges, even if decreasing my available credit, haven't been post as fast as my payments have. This means that, by the time they report (one or two days after my cut-off date), I will have a 0 or minus something balance. Is this bad for my credit score?

Cheers

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As creditwherecreditisdue said the effect should be minimal.

Do you realize lots of folks would like to have that same "problem" of 0% utilization!!! 

[Anonymous]

No, it doesn't "hurt" your score, though you aren't probably getting the highest "tweak" score.

So, if you are going to shop new credit, you probably want to let a small balance (like $20) report on a single account for "tweaking" the score. 

[DI]

I let zero balances report on all 11 cards a few months ago and loss points on CreditKarma.  I regain those points when I let 1% util report.  I assume it works the same with FICO. 

[creditwherecreditisdue]

CK scores are not FICO's and do not behave the same as FICO's. Different FICO scoring models do not react in the same way to 0% UTIL. It even makes a difference what your FICO score level is when gauging the model's reaction to 0% UTIL. The important thing is that the difference imposed by 0% UTIL is small and nothing to be particularly concerned about. You can also fix it easily the next month!

[Jazzzy]

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@DI wrote:
I let zero balances report on all 11 cards a few months ago and loss points on CreditKarma.  I regain those points when I let 1% util report.  I assume it works the same with FICO. 

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I try not to even look at the other scores because they can be terribly misleading...but sometimes I take a peak. My Sears MasterCard gives me a free TU TransRisk score. I have only a "C" for their rating for number of accounts. I know I have a lot of accounts (because of ever-changing school loans...they transfer all the time without my knowledge). I have 26 accounts.

Guess what you have to have to get an "A" for number of accounts on your TransRisk score....40. Yes, 40. If I went out and got 14 more accounts, then I'd have an "A." I think this scoring method is backwards from what it should be.

That's crazy. I think I'd get terribly spanked by FICO for having 40 accounts. As far as I'm concerned, some of these scoring algorithms can be hazardous to your financial health.

[DI]

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@LynetteM wrote:

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@DI wrote:
I let zero balances report on all 11 cards a few months ago and loss points on CreditKarma.  I regain those points when I let 1% util report.  I assume it works the same with FICO. 

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I try not to even look at the other scores because they can be terribly misleading...but sometimes I take a peak. My Sears MasterCard gives me a free TU TransRisk score. I have only a "C" for their rating for number of accounts. I know I have a lot of accounts (because of ever-changing school loans...they transfer all the time without my knowledge). I have 26 accounts.

Guess what you have to have to get an "A" for number of accounts on your TransRisk score....40. Yes, 40. If I went out and got 14 more accounts, then I'd have an "A." I think this scoring method is backwards from what it should be.

That's crazy. I think I'd get terribly spanked by FICO for having 40 accounts. As far as I'm concerned, some of these scoring algorithms can be hazardous to your financial health.

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I have a total of 38 accounts reporting.  My FICO scores are faring well.  I say if you can manage a lot of accounts without missing any payments, the TransRisk score is right on it.  

[moondog7324]

Manage your debt, not your FICO!

[DI]

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@moondog7324 wrote:
Manage your debt, not your FICO!

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We are PIF every month members.  Managing debt isn't a problem.