FICO impact when many cards are unused -- is there any?

[Anonymous]

As most of us know, there are codes that each CRA uses for describing factors that cause your score to take a hit, even a small hit.  There are a lot of codes so the different causes can be very specific, very granular. 

A common code appears to be 00024, which translates to:
      EQ: "no recent revolving balances"
      TU: "no recent revolving balances"
      EX: "lack of recently reported balances on revolving/open accounts"

Here's my question, which can be best described as a thought experiment.  Suppose we have somebody with 10 open credit cards, no other revolving lines of credit.  All cards have been open for at least three years.  His other factors are good: no late payments or other negative info, few inquiries, a credit history of 10 years, low utilization, etc.

Now suppose that he has used one card modestly every month for several years -- but for the last 15 months he has not used any of the remaining nine cards.  He hasn't made even one purchase with them.

Does FICO care that almost all of his revolving accounts have shown zero balances for a long time?  Or rather, is it the case that to completely avoid taking any hit from this particular factor, all he needs to show is at least one revolving account with a positive balance? 

(Note: we all know that, just before a major credit pull, you can get a few extra points from having a zero balance on all cards but one.  My question is something else: whether having a long history of zero balances -- no recent activity on the cards for a long time -- would activate this "no recent activity" ding.)

Another way to say it is: does FICO consider EACH revolving account for some recent activity (e.g. last six months), or does it look only to see whether there's been activity in AT LEAST one?  (In which case you could have no activity on nearly all your revolving accounts for years without FICO penalty.)

Final note: I realize that there are VERY good reasons to use each credit card every so often, chiefly to prevent the issuer from canceling it.  But in this question I am trying to narrowly focus on the question of how lack of use affects your FICO score.

My guess is that it's the latter: that you could in theory put all your cards but one in a shoebox and leave them there for years without it affecting your FICO.  But I am curious whether anyone can confirm that.

[vanillabean]

The shortest, quickest, easiest and most realistic answer may well be that the CCCs will close your inactive cards before you get a chance to see what FICO has to say about it.

A more detailed answer, not necessarily better, follows here. A CCC for a given month may or may not report a card that hasn't been used. If the card has been used, but has also been zeroed by the statement date, the CCC will probably report it. When a CCC reports a card, it’ll likely update the activity date too. It's customary that a card that has been used will be reported. It’s not clear whether the CRAs consistently rely on the information from the CCCs and whether the FICO consistently relies on the information from the CRAs. Sometimes FICO speaks of a dormant card; it’s not obvious to me what that’s based on or what people mean when they mention it.

Aren’t you glad you asked?

[Anonymous]

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@Anonymous-own-fico wrote:

The shortest, quickest, easiest and most realistic answer may well be that the CCCs will close your inactive cards before you get a chance to see what FICO has to say about it.

A more detailed answer, not necessarily better, follows here. A CCC for a given month may or may not report a card that hasn't been used. If the card has been used, but has also been zeroed by the statement date, the CCC will probably report it. When a CCC reports a card, it’ll likely update the activity date too. It's customary that a card that has been used will be reported. It’s not clear whether the CRAs consistently rely on the information from the CCCs and whether the FICO consistently relies on the information from the CRAs. Sometimes FICO speaks of a dormant card; it’s not obvious to me what that’s based on or what people mean when they mention it.

Aren’t you glad you asked?

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Thanks for your thoughts, M-O-F. 

You may be overstating how quickly a credit card company (CCC) would be likely to shut down an unused card.  In my thought experiment, the nine cards had been unused for 15 months.  It's very possible of course that a CCC might shut down a card after that length of time -- that's exactly why it's a good idea to use any particular card at least every six months.  But to say that all nine cards would have been canceled by then, or even many of them, is likely to overstating it.

Certainly I think we can imagine all nine cards still being intact (uncanceled) after 15 months.  So if it's ok, let's stick with the original thought experiment.

Assuming we do that, it's hard for me to be sure what your more detailed answer would boil down to.  Is it: "I don't know"?  I.e. maybe the guy having nine unused cards for 15 months will have a (slightly) damaging impact, or maybe it doesn't have any such impact -- you don't have a definite opinion.  Is that right?

Certainly I don't know the answer for sure, which is the reason I am curious to hear if others do.  Again, many thanks for your feedback.

[tufa4311]

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@Anonymous-own-fico wrote:

The shortest, quickest, easiest and most realistic answer may well be that the CCCs will close your inactive cards before you get a chance to see what FICO has to say about it.

A more detailed answer, not necessarily better, follows here. A CCC for a given month may or may not report a card that hasn't been used. If the card has been used, but has also been zeroed by the statement date, the CCC will probably report it. When a CCC reports a card, it’ll likely update the activity date too. It's customary that a card that has been used will be reported. It’s not clear whether the CRAs consistently rely on the information from the CCCs and whether the FICO consistently relies on the information from the CRAs. Sometimes FICO speaks of a dormant card; it’s not obvious to me what that’s based on or what people mean when they mention it.

Aren’t you glad you asked?

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Or, to put it another way, I.....don't....know

[JagerBombs89]

If you let a balance report $0 for *X* amount of months, when it finally reports a balance, you will get a notification that there is recent activity on an inactive account.  Even if you make a purchase every single month and let it report $0, FICO thinks that you haven't used the account.  I say *X* months because I don't know the exact number.  Now everytime I have done the above scenario, my FICO drops a couple points for some reason?

Last, I have had an account open since 2009, last used it at the end of 2010 and it still is reporting *Open*  even though I don't use it.  I don't know what would happen if it reported a balance...

[vanillabean]

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@JagerBombs89 wrote:

If you let a balance report $0 for *X* amount of months, when it finally reports a balance, you will get a notification that there is recent activity on an inactive account.  Even if you make a purchase every single month and let it report $0, FICO thinks that you haven't used the account.  I say *X* months because I don't know the exact number.  Now everytime I have done the above scenario, my FICO drops a couple points for some reason?

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Given this thinking, the majority of my accounts are inactive, and yet my scores are comfortable.

[Anonymous]

I get it.  It's been bothering me too.  I do think they take all inactive accounts into consideration.  I've notice a 1 point drop or a stand still when most of my cards are reporting zero balance.  It's not much of a difference, but it is there.

[JagerBombs89]

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@Anonymous-own-fico wrote:

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@JagerBombs89 wrote:

If you let a balance report $0 for *X* amount of months, when it finally reports a balance, you will get a notification that there is recent activity on an inactive account.  Even if you make a purchase every single month and let it report $0, FICO thinks that you haven't used the account.  I say *X* months because I don't know the exact number.  Now everytime I have done the above scenario, my FICO drops a couple points for some reason?

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Given this thinking, the majority of my accounts are inactive, and yet my scores are comfortable.

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The drop was < 5 points and it rebounded within 1-2 months.  I still maintained 800+ with my *inactive* accounts as well so it's negligible.

[Anonymous]

Hey JagerBombs89!  Thanks for your feedback.  You write:

If you let a balance report $0 for *X* amount of months, when it finally reports a balance, you will get a notification that there is recent activity on an inactive account.  Even if you make a purchase every single month and let it report $0, FICO thinks that you haven't used the account.  I say *X* months because I don't know the exact number. 

That's really interesting.  I hear you that you don't know the exact value of X.  Do you have a guess, however, based on your experience?  As in something like: "I don't know what X is, but I think it's somewhere between ___ and ___."

[MarineVietVet]

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@tufa4311 wrote:

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@Anonymous-own-fico wrote:

The shortest, quickest, easiest and most realistic answer may well be that the CCCs will close your inactive cards before you get a chance to see what FICO has to say about it.

A more detailed answer, not necessarily better, follows here. A CCC for a given month may or may not report a card that hasn't been used. If the card has been used, but has also been zeroed by the statement date, the CCC will probably report it. When a CCC reports a card, it’ll likely update the activity date too. It's customary that a card that has been used will be reported. It’s not clear whether the CRAs consistently rely on the information from the CCCs and whether the FICO consistently relies on the information from the CRAs. Sometimes FICO speaks of a dormant card; it’s not obvious to me what that’s based on or what people mean when they mention it.

Aren’t you glad you asked?

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Or, to put it another way, I.....don't....know

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Good for you. I have no problem saying those three words myself.

I wish more people were honest and humble enough to admit they don't have all the answers.