Zero Balance.

[Qlacky224]

I use my cards extensively, but I pay them down to zero before the end of their billing cycles. While I'm concerned that the credit bureaus don't know that I'm using the cards.

[GZG]

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@Qlacky224 wrote:

I use my cards extensively, but I pay them down to zero before the end of their billing cycles. While I'm concerned that the credit bureaus don't know that I'm using the cards.

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you get on-time payment credit every time your bill is paid on time and in full regardless what the balance is, even if you don't use the card and the bill is $0 or they don't even generate a bill. 

If you don't allow a statement balance to publish to your credit reports that's a negative for reasons other than your credit score. It shows the banks who look at your credit report that you aren't 'using' your credit cards. Some banks like that, some don't like that, some are indifferent.

This is an amex card. They don't show if you've used the card if you don't let a statement balance publish. 

this is a credit union card, they showed I used the card, despite not letting the balance report to it.

some banks will show that you ARE using your credit cards, even if you don't allow a statement balance to publish. Mostly credit unions. They do this by showing how much you've paid on your account balance. 

TLDR: you have nothing to worry about

you're okay to let your balances report because you are paying them in full every month, but if you don't want to do that, you don't have to.

[Horseshoez]

I always keep my accounts at zero and that has never held me back; each time I apply for new credit, which I do roughly once per year or so, my starting limits go up over previous limits.  Here are my most recent approvals:

• 2020 - new card yielded a starting limit of $3,000
• 2021 - new card yielded a starting limit of $6,000
• 2022 - new card yielded a starting limit of $11,700
• 2023 - new card yielded a starting limit of $23,600
• 2024 - new card yielded a starting limit of $30,000

In the case of each of the above applications, there was a trivial balance on one or two cards (I pay them in full before the due date and allow a few latent charges to trickle in before the statement date).  Said another way, I do not believe there is any negative to keeping most balances at or near zero; that said, on the few occasions when none of my latent charges hit before my statements cut, I did get hit with the dreaded, but fortunately temporary, All-Zero penalty of anywhere between 15 and 25 points on my FICO scores.

[Kforce]

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@Horseshoez wrote:

I do not believe there is any negative to keeping most balances at or near zero; that said, on the few occasions when none of my latent charges hit before my statements cut, I did get hit with the dreaded, but fortunately temporary, All-Zero penalty of anywhere between 15 and 25 points on my FICO scores.

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^^^^ This 

[Realist]

Who knows what actually triggers an all paid off penalty, whether it's random or whether there are certain triggers, but I'm fairly sure I've never been hit by it ever.  I hold a lengthy number of CC lines, most unused unless intentionally cycled to avoid closure, but always paid off monthly.  That effect has produced a mostly consistent FICO score across years, fluxuating a few points each month.

Not all that long ago I started to push my credit to the limit, abusing it as much as possible, and within reason.  My scores have only gone up and are now resting in a range closely approaching 850, but not quite there yet.  This is while paying off all balances every month.    I don't think an all paid off penalty is a guaranteed thing for everyone.

[Horseshoez]

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@Realist wrote:

Who knows what actually triggers an all paid off penalty, whether it's random or whether there are certain triggers, but I'm fairly sure I've never been hit by it ever.  I hold a lengthy number of CC lines, most unused unless intentionally cycled to avoid closure, but always paid off monthly.  That effect has produced a mostly consistent FICO score across years, fluxuating a few points each month.

Not all that long ago I started to push my credit to the limit, abusing it as much as possible, and within reason.  My scores have only gone up and are now resting in a range closely approaching 850, but not quite there yet.  This is while paying off all balances every month.    I don't think an all paid off penalty is a guaranteed thing for everyone.

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It is real; if literally all of your revolving lines of credit are reporting zero on a day when your scores are calculated, said scores will drop 15 or more points.

[Realist]

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@Horseshoez wrote:

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@Realist wrote:

Who knows what actually triggers an all paid off penalty, whether it's random or whether there are certain triggers, but I'm fairly sure I've never been hit by it ever.  I hold a lengthy number of CC lines, most unused unless intentionally cycled to avoid closure, but always paid off monthly.  That effect has produced a mostly consistent FICO score across years, fluxuating a few points each month.

Not all that long ago I started to push my credit to the limit, abusing it as much as possible, and within reason.  My scores have only gone up and are now resting in a range closely approaching 850, but not quite there yet.  This is while paying off all balances every month.    I don't think an all paid off penalty is a guaranteed thing for everyone.

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It is real; if literally all of your revolving lines of credit are reporting zero on a day when your scores are calculated, said scores will drop 15 or more points.

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I'm not going to argue that it's real or not, I tend to believe it is real from the accumulation of stories of others.  All that I can state with certainty, is that I've never been hit by it, and I'm 30-40 years of credit in the making.   I monitor my score like I make financial numbers dance.  It's what I live and breathe, and much joy as a hobby in life.

I hold multiple dozen of credit lines, and I can attest that there are many reporting zero, and those utilized being paid off in full each month, and yet this penalty has never been applied to me - yet, knock on wood.

I've often argued that no two profiles are the same, both in FICO score or credit profile makeup.  I believe that not everyone will fall into this community accepted notion.  There has to be certain triggers that none of us are aware of, that some will fall into, and others may not.

Not long ago, I argued that I hit six hard limit inquiries in a reasonably short time, and everyone reasonably stated that it will pull your score down.  I have a disposable FICO score, there is nothing more in life I need that I don't already have.  You know what occured instead? My score went higher, approaching 850 but still shy.  

What people think they know, isn't actually what is certain.  It's all speculation based upon best practices and educated guesses.  In the case of an all zero penalty, we can't claim it's as cut and dry absolute, if not everyone is triggering it while still reporting all zeros.

[SouthJamaica]

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@Qlacky224 wrote:

I use my cards extensively, but I pay them down to zero before the end of their billing cycles. While I'm concerned that the credit bureaus don't know that I'm using the cards.

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They can tell that you're using the cards during the billing cycle.

The only down side to paying all cards to zero before the end of the billing cycle is that you might get hit with the FICO "all zero penalty".

The way to avoid the all zero penalty is to allow one card to report a small balance before you pay it off.

[gabbygail]

Great info. Thank you for this!