Confused

[golo]

I have been reading and it's unbelievable  how you get penalize for having 0 balance in CC.....

[RobertEG]

ND does not equate to no activity during the month.  It equates to absence of reported data for that item for that period.

Creditors will routinely send electronic "updates" of accounts monthly, not necessarily only on accounts with changes or activity since their last reporting.  Those transmissions are a long, long string of data, usually repeating the entire account, whether there were changes or not.  They can repeat an entire account history, or just report on accounts and items with changes.

By reporting data on accounts with no changes, they are ostensibly saying the information remains correct, as per their requirement under FCRA 623(b) to maintain the accuracy of previously reported information, so repeating with no changes has significance, and is routinely done.

If a transmission is sent that includes the reporting of a code, it is recorded.  If a transmission is sent that does not include a specific code, that code gets a No Data reported for that month.

Additionally, the snapshot of the closing balance reported monthly does not provide for any determination whether the account was active that month.  To make such a determination, FICO would have to rely upon other information, such as a change in the average daily account balance.  I am not sure such information is even reported to consumer credit files, and if so, that it would be reported consistently.  If not, then a FICO assumption of lack of account activity over the month based only on an ND or zero snapshot account balance at time of reporting would be purely speculative, and often inaccurate. 

However, many on the site have consistently reported that all accounts reporting a $0 balance does negatively impact their score.  So FICO is apparently able to extract some way of determining inactivity, and using that in their scoring.  I just dont think it is either ND or $0 snapshot balance.  My opinion only.

[kjm79]

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@RobertEG wrote:

However, many on the site have consistently reported that all accounts reporting a $0 balance does negatively impact their score.  So FICO is apparently able to extract some way of determining inactivity, and using that in their scoring.  I just dont think it is either ND or $0 snapshot balance.  My opinion only.

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This was the point of my post.  How or why FICO scores the way it does I won't even hazard a guess.  But there have been plenty of reported instances of scores dropping when all cc's were at zero, or paying off the only listed installment loan.  Or increases when an installment was added or a small balance reported after months of zero balance reporting.  For whatever reason, the score is dinged for those zero balances no matter how counterintuitive that may sound. 

[Revelate]

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@RobertEG wrote:

ND does not equate to no activity during the month.  It equates to absence of reported data for that item for that period.

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Robert,

You may well be correct, but analyzing my own reports, it was 1:1 where I'd done nothing with either a revolving tradeline or a collection, where nothing was reported was where there was no activity.  This may be lender by lender (though with collections it's pretty self-explanatory I suspect) but it held true on mine.  

I will again point out that payments are reported to Experian, and if one bureau is receiving them, I strongly suspect that all three are.  It's just not that challenging from an algorithm perspective to figure out based on that whether there was activity on the account: if you know the reported balance, and the reported payments, it's not a long walk: last balance - payments - current balance > 0 means there's activity on the card.  OK, fees break that particular metric, but it's not that convoluted to implement and it's minor in compute time.

It's pretty much guarunteed that the actual algorithms are far more complicated than this, so it's certainly within the realm of possibility that this is actually factored in somehow.

[MarineVietVet]

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@Crashem wrote:

You should get the raw credit report for more info.  Act like you are going to intiiate a dispute online and it will give you access to the raw report.  If you look at the account history, there should be a lot more info.  If you aren't seeing your behavior there, then come back and tell us.

Just to let you know, every month there should be a line that shows current balance/minimum payment due/amount paid etc.  Remember every creditor reports to CRAs differently (some on a certain date, some when billing cycle is over, some when payment is due).

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Would you mind clarifying what you mean by this? Backdooring your reports by pretending to dispute in order to obtain a free credit report that you would not otherwise be entitled to is considered unethical and the advocating or discussion of this is not allowed as per the part of the forum's Terms of Service that prohibits: Discussion of illegal or unethical activities or providing links to other websites containing such information.