1% Credit Usage Provides Best Credit Score?

[Anonymous]

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@SharonLea wrote:

Yes, I've also noticed that 1% is the sweet spot for credit utilization. Usually, I pay off all my balances before my statement closing dates, my credit utilization is reported as zero, and my FICO score is 817. But occasionally, I need to make a small purchase between the time I pay my balance and the time my statement cuts, and the small charge appears on my statement as an unpaid balance. At first I was afraid that with an unpaid balance reported, my FICO score would go down. But actually, when my credit utilization goes from zero to 1% or a few tenths of 1%, my FICO score increases from 817 to 842. I've noticed this pattern consistently for the past two years.

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Wow, 25 points lost in reporting 0% as opposed to a small balance is quite significant.  I've never heard of a yo-yo of that amount when going between 0% and 1% overall utilization reported.

[Thomas_Thumb]

From what I have seen reported here a 20 to 30 point drop with no cards reporting balances (0% utilization) is standard and to be expected. I'll never be testing that myself as I let balances report and then PIF.

Regarding under 1% utilization being better than 3% or 5% reporting - For my file, I have not seen Fico 08 scores change anywhere in the 1% to 6% aggregate utilization reporting range.