Active vs inactive revolving credit card accounts

[Anonymous]

I’ve seen reason codes that reference things such as not enough recent activity or balances on accounts.

With that being said, I know I haven’t used most of my cards in quite some time so I was thinking of charging a few dollars like $10 or less on each one.

My questions are:

Would this help?

Can I pay them right away or am I better off waiting until the small balances hit the credit bureaus and then pay it off?

How does the credit bureaus know if an account is active or inactive?

Is there any dollar threshold I should target such as over $50 or it doesn’t matter?

I’m trying to understand this all and I look forward to your advice!

[SouthJamaica]

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@Anonymous wrote:
I’ve seen reason codes that reference things such as not enough recent activity or balances on accounts.

With that being said, I know I haven’t used most of my cards in quite some time so I was thinking of charging a few dollars like $10 or less on each one.

My questions are:

Would this help?

Can I pay them right away or am I better off waiting until the small balances hit the credit bureaus and then pay it off?

How does the credit bureaus know if an account is active or inactive?

Is there any dollar threshold I should target such as over $50 or it doesn’t matter?

I’m trying to understand this all and I look forward to your advice!

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1. The credit bureau can tell if it's been active or not, even if the balance reported is zero.

2. It's good to use each card a little now and then, not for credit reporting purposes but for purposes of keeping the accounts from being closed by the lender.

3. No there's no threshold amount.

4. The reason codes which say not active enough are inaccurate, they are using the fact of the account's being  reported having a balance as a proxy for 'activity'. If I were you I would disregard that one.

5. If you let one card report a balance each cycle, that's enough.

[Anonymous]

Awesome! Great replies!

I was wondering though how the credit bureaus know if an account is account or not of the balance keeps getting reported as zero?

[Pikaboo-icu]

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@Anonymous wrote:
Awesome! Great replies!

I was wondering though how the credit bureaus know if an account is account or not of the balance keeps getting reported as zero?

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  Fico Voo-Doo

Welcome to My Fico.. 

[Anonymous]

I believe that there is a field called Date of Last Activity (DOLA) which is submitted by creditors but which is not visible to the consumer on his credit report.  That's one way that the bureau would know.

You should certainly use any particular card once every six months to keep it open.  If the card is a store card, and you can't think of something you absolutely want or need from that store, you don't have to treat the Six Month rule as binding.  I am not sure I have ever heard of a store card being closed before 13 months of inactivity have occured, and many stores will give you much longer.

[Trudy]

In regard to store cards or retail cards I have a card opened in 1999 that never closed.  However, the credit limit decreased from high to $100.  Sometime after I started rebuilding my credit I called to request a new card because I had long since lost it or gotten rid of it and wanted a higher CL to offset some of my overall debt.  Forgot I even had it until I pulled MyFico reports for the 1st time a few years back.  However, the only draw back was they did a hard pull because of the inactivity and although I received another high CL I now have that HP on my account.  So i guess it's possible other retail cards could also do this should you ever want to "reactivate" per their guidelines or get a new card or a  higher limit if decreased over time.

[Anonymous]

SJ pretty much hit it on the head. But one more thing...

When you choose your one account to keep a balance on, make sure that it's an actual credit card and not, say, a retail card. If the only revolving account reporting a balance is just a store card, you will still receive a penalty as if all were inactive. I found this out recently, and my scored dropped by 11 points because of it. Those points are easily recoverable once one credit account reports a balance, though, so its fixable. 

[RobertEG]

Creditors will always have their own internal recorded history of when their own account/card was used, and the balances, down to the daily balance amount, for at least the current month, as that is needed to determine average daily balance should the account be charged interest.

That level of detail is not known to the CRAs.

A creditor can, based on their own records, choose to close a revolving account if not used for a period of time.

The FCRA does not use the term "inactive" for revolving accounts, and there is no account status code that records "inactive"

CRAs are noticed whether or not a revolving account is Open or Closed.

Unlike installment loans, a creditor can close a revolving account, which thereafter prevents the consumer from making any addtional charges, and if the debt balance is $0, thereafter relieves the creditor of any responsibility to continue to send billing statements under the Fair Credit Billing Act.

The creditor is required to promptly notice the CRAs if they close an account (i.e., it is no longer active).

That has a specific field code under the Metro 2 format, and will appear in your credit report.

The CRAs will not change a field code to closed on their own volition, such as if the account shows months of repeated $0 balances.

[Revelate]

The inactive bit frankly is more on the fraud detection side when we're talking CMS's.

There is a DOLA/DOLU/whatever, that is actually carried by the bureau and is set to the last date which the tradeline was updated.

That's used for generating a FICO score when we're talking thin and no-files and maybe at the six month mark it would matter (someone could test this with revolving utilization metric breakpoints if they have a Synchrony card as one such lender that doesn't update unless there's a balance, many update $0), but really we're talking points in the margin that can be managed anyway with any reasonable thickness in the file, which everyone here should have at some point during their build.