1% Utilization vs 0% Utilization which is better?

[The-Credit-Disciple]

Great afternoon Fico Fam😀
Is it better to have 1% Utilization or 0%? Reason is because i read where if its always 0% it will look like your not using any credit to the Fico Scoring system. Please Fico Fam help a brother out. Thanks in advance😀😀

[jdbkiang]

The usual recognized sweet spot is above 0% and below 8.9%. 0% shows no usage, which is almost never a good thing, while staying below 8.9% will prevent you from looking like you’re using too much.

[iv]

Remember that "above 0%" really means "not $0.00".

You don't need to actually report 1% or higher - just not $0.00.

Given that some lenders won't bother to charge/report for a couple of dollars... you'll see many people recommend using $5.00 or so as your minimum.

[Anonymous]

0% = $0 balance on all cards = All Zero FICO penalty of 15-20 points. Keep in mind that FICO scoring rounds up so any amount reporting on any card equals 1%, many front end software mistakenly rounds down and show 0% even when balance is present.

[The-Credit-Disciple]

Great info!! I have been paying it down to zero, wowsers. Thanks i will definitely leave a few bucks on them NOW😀

[jdbkiang]

To avoid interest, just pay it off before the next statement closes.

[Anonymous]

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@jdbkiang wrote:
To avoid interest, just pay it off before the next statement closes.

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You have to pay the statement balance in full on or before the "statement due date" in order to avoid interest, typically about 5ish days before the next statement closing.

[jdbkiang]

Right. So you spend $500, pay off $480 before the statement closes. Your statement balance is now $20, then you pay it off before the due date.

[Anonymous]

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@jdbkiang wrote:
Right. So you spend $500, pay off $480 before the statement closes. Your statement balance is now $20, then you pay it off before the due date.

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This is assuming you have a need for a good score in the very near future.   If not, pay the $500 close to the due date to maximize the interest on the money that the cc is lending you for free.

[jdbkiang]

I thought it was clear OP was asking in regards to the effect utilization had on credit scores...