Impact of a Few Cards at Zero?

[ridgebackpilot]

Thanks to your collective advice, I'm holding both my overall and individual credit card utilization at or below 8.9 percent. 

But I do have a few cards (5-6) reporting zero balances. My question is whether that makes any difference regarding my scores? Or doesn't it matter if most cards are reporting a balance?

[Anonymous]

There is a penalty in all FICO models any time all your revolving accounts are reporting zero.  This penalty can be eliminated by having exactly one card report a positive balance.  This card should be in your name (not an AU card), a true credit card (not a charge card), and a card with a credit limit under 34.9k.

Once you have one card reporting a balance, there is no scoring advantage to having more cards reporting a balance.  Indeed, in all FICO models you will eventually get a penalty if enough of your open accounts report a positive balance.  The FICO 8 Classic model appears to be the least sensitive there, whereas the Bankcard Enhanced flavors of FICO and the old mortgage models are the most sensitive.

[SouthJamaica]

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@Anonymous wrote:

There is a penalty in all FICO models any time all your revolving accounts are reporting zero.  This penalty can be eliminated by having exactly one card report a positive balance.  This card should be in your name (not an AU card), a true credit card (not a charge card), and a card with a credit limit under 34.9k.

Once you have one card reporting a balance, there is no scoring advantage to having more cards reporting a balance.  Indeed, in all FICO models you will eventually get a penalty if enough of your open accounts report a positive balance.  The FICO 8 Classic model appears to be the least sensitive there, whereas the Bankcard Enhanced flavors of FICO and the old mortgage models are the most sensitive.

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All good points.

I would add to that that if you relying on one card to report a non-zero balance, don't let it be a Chase card, because Chase will report mid-cycle if you pay the account down to zero at any time during the cycle.

[Anonymous]

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@ridgebackpilot wrote:

But I do have a few cards (5-6) reporting zero balances. My question is whether that makes any difference regarding my scores? Or doesn't it matter if most cards are reporting a balance?

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From your CC images it appears you have a bunch of CC's, maybe 20+.  If 5-6 of them have $0 reported balances, that means that you have something like 70% of them with a [non-zero] reported balance.  It hurts you more that you have so many with reported balances, rather than if you just had (say) 1-4 of them with reported balances and all of the rest with $0 balances.  This scoring difference may only be small like 5-10 points, so I wouldn't sweat it either way to be honest.  But to answer your original question, it does impact FICO scoring if most of your cards are reporting a balance (rather than just a couple) and this can be seen more magnified with the mortgage models relative to FICO 8.