Is reporting a <9% util balance better than reporting a $0 balance in FICO's eyes?

[Anonymous]

 I used the FICO simulator to see what would happen to my scores if I left <9% balance on my credit balances versus having a zero balance. My FICO estimated range is always higher leaving a <9% percent balance versus leaving a $0 balance. For anyone who have experimented to see if their fico went any higher, did you receive more points for reporting a extremely low balance or more point for reporting a $0 balance?

[vanillabean]

An overall util of 0% may leave the impression with the CRAs that you are not using any credit, so that's not optimal. You need to use credit in a responsible fashion to show you're not a risk.

As for an actual experiment, my currently reported overall util is 1%. In an week and a half, it'll be precisely 0%, so I can tell you then for sure. But my simulator came to the result as yours.

As for how much 9% is not as good as 1% could in part depend on the util of each card.

I pulled the TU score reports for DW and me yesterday. Because she's better in every of the few ways that we don't share, I trivially expected her score to be better, but it was one point lower than mine. That has never happened before

It turned out that the one card she has that I don't have has a relatively low credit limit, and the balance was like the others, so the card's util was high. If half of its balance had been on another card, her score would have better.

The card has now been zeroed (but will not report until a month from then), which means she too will participate in the experiment that you asked about.

[chasmith]

FICO seems to measure overall utilization and separately the highest utilization on any revolving account.  So if your utilization is 5% but you have a card with a $25.00 balance and a $100.00 CL (25% util on that card), your score could be lowered.

I think the best answer is to have balances on 2/3 of your cards, with each of your cards below 9% of credit line.  You may need to rotate across all the cards so they show occasional use.

[llecs]

Try as I might, there's a post within this very board that talks about this. Long-time poster, psychic, posted results after letting all of his CCs report $0 vs. letting one report a balance. He has scores in the 800s and nothing was influencing his scores except for the balances. I wish I could find it. Seems like he took a big loss (20+) for all of them reporting $0, but he saw a rebound when he let $50 or so report on one of his many CCs.

I've always been told that for max points, let all report $0 with the exception of one. That one should report a balance of less than 9% of the CL. And it is a YMMV based on the scoring bucket, but some in here have posted differences in score by letting that one report at 4% vs. 5% and so on. There seems to be that sweet spot for many but it is different for most. Per number of CCs reporting a balance, I've always been dinged with that annoying red flag on the Credit At A Glance page if I let more than half report a balance.

Of course any damage per util is always temporary. You have have them all maxed out this month and suffer big, but next month, your scores would bounce back if everything goes back to the way it should.

[vanillabean]

Let's say that "let all report $0 with the exception of one. That one should report a balance of less than 9% of the CL." Let's assume also no baddies and a max of two inquiries within the last year's time.

In a worst-case scenario, how low can such a scenario's score get? 760? I'm guessing you can't go wrong no matter what.

[llecs]

YMMV.

That's all I can say. If you have a good mix of credit (I'm guessing at least 2 revolving and I'd argue a store charge card), then you can hit 800. The key is not apping, no new credit, no baddies, and plenty of time by which to expand the length of credit history and AAoA. Check out the FICO High Achievers thread and you'll see what others did to hit 760.

[Anonymous]

I once thought having 0 balances would be the greatest.

That is until I paid them all off and my scores all went down. 

Better to have anywhere from 1% to 9% reporting.  Show

you are using credit responsibly.

EX  782 plus score

EQ  802

[vanillabean]

"I once thought having 0 balances would be the greatest.

That is until I paid them all off and my scores all went down."

But better to have loved and lost than never to have loved at all

Did you temporarily lose more than about a dozen points at each CRA?

[Anonymous]

llecs:  That was posted under  understanding fico scores.  It

was Fused that posted how Psychic had an EX score of 842.

It was posted sometime in early May in answer to my post:

Does anyone have 850 FICO?

Hope this is useful.  If I knew how to cut and paste

I would.

[vanillabean]

My Experian score is 842! (EQ 810 / TU 813 / EX 842)