Lack of card activity = Drop in score?

[SouthJamaica]

---

@KatSoDak wrote:

---

@GatorGuy wrote:

Remember FICO scores are a snapshot in time. If all your credit cards show zero, they algorithm sees it as you not using your credit cards. Their research says someone who doesn't use credit cards is a slightly higher credit risk then someone who uses them responsibly and within limits. 

---

I do not see how a CRA that parses data, including the highest amount charged on each trade line, can assign a greater risk to an account that was paid to zero within the same reporting period it had a balance, compared to a trade line that also had a charge during a reporting period but was not at zero when reported.

Too bad we can't see the statistics behind this claim from FICO.

---

Me too, except I have a strong hunch they don't exist. If they do exist, I'll wager that they are being seriously misinterpreted

[Phana24]

---

@SouthJamaica wrote:

---

---

I guess you got hit with the "all zero" penalty which comes when all cards report zero balance.

You get rid of it by letting at least one card report a small balance before you pay it off.

The FICO insiders who participated in a Q and A with us claim that statistics have shown that people who have small balances are less risky than people who have no balances.  [I personally don't believe it; I believe the real reason is that FICO is out to improve profitability for their customers, and people who abhor debt and prefer zero balances are simply less profitable]

---

I completely agree except for one minor item.   Simply reporting a balance does not mean the cc holder will pay interest.   As long as the balance is paid in full prior to the next billing cycle, the institution does not make a penny on interest.  I think the answer lies in a)encouraging those who don't pay interest to pay faster and b) saving server time(and/or keeping servers smaller) by not bothering to delve into data that provides insights that will make borrowers look better.    I would think statistics would show that those who use cards heavily, yet incur no interest or can play the zero balance before statement game are far better risks than people who actually have to pay interest.  Perhaps the gurus have additional insight.

[GatorGuy]

---

@KatSoDak wrote:

---

@GatorGuy wrote:

Remember FICO scores are a snapshot in time. If all your credit cards show zero, they algorithm sees it as you not using your credit cards. Their research says someone who doesn't use credit cards is a slightly higher credit risk then someone who uses them responsibly and within limits. 

---

I do not see how a CRA that parses data, including the highest amount charged on each trade line, can assign a greater risk to an account that was paid to zero within the same reporting period it had a balance, compared to a trade line that also had a charge during a reporting period but was not at zero when reported.

Too bad we can't see the statistics behind this claim from FICO.

---

I am not 100% in how the reporting works, but my understanding is that if your reported balance is zero then FICO will not know the card was used. Of course your CC company will know, but it will not be considered in your FICO scoring since only a zero balance is reported. 

[dunn2500]

i just got dinged -17 pts for using $175 out $1300 so idk what the solution is......i did this because i was getting dinged for 0 balances, so frustrating......makes no sense whatso ever

[dunn2500]

---

@GatorGuy wrote:

Showing balances is not the same thing as carrying a balance. I always have balances report but haven't carried a balance or paid a dollar of interest in 15 years. 

Remember FICO scores are a snapshot in time. If all your credit cards show zero, they algorithm sees it as you not using your credit cards. Their research says someone who doesn't use credit cards is a slightly higher credit risk then someone who uses them responsibly and within limits. 

---

how do you do that?.......mine report on weird days, and not even on statement days......i would really like to know "the trick" and stop wasting time trying to figure this out for months now.....I feel like a complete idiot........carry no bal and get dinged carrry a small balance and still get dinged....

[Phana24]

---

@dunn2500 wrote:

i just got dinged -17 pts for using $175 out $1300 so idk what the solution is......i did this because i was getting dinged for 0 balances, so frustrating......makes no sense whatso ever

---

It's indeed baffling, hopefully one of the credit wizards on here joins in.  I do know that carrying less than 10% on EACH card earns a premium, so try $100 on that card for next month.  I've found that under 6% on each card showing a balance maxes my short-term EX score.  I'm slightly OCD about cashback cards, so I have about 12 between the wife and I that I juggle balances and uses for bonus promotions and categorys per quarter and all those games.  Occasionally I screw up or get stuck out of town and get whacked with a 30% balance with a card.  However, I don't get dinged anywhere near 17 pts.  I will guess that your file is rather thin, which might explain some of it.  Try getting under 6%, and ideally alternate which card shows a balance.  If I let my Citicard go unused for 6 mos and then show a small balance, I've seen reports that say something to the effect of "credit card activated."  Whether that means it did enter into the algorithm used by that agency, I have no idea.  Good luck trying to approach this with logic and intelligence.  While I don't believe CRAs are necessarily bad actors, this hypersecrecy about their algorithms simply creates more angst and ill-will. 

[GrandBay]

@dunn2500  try $65/$1,300 and see if your scores improve

$175 is much higher than recommended for AZEO purposes

[dunn2500]

am gonna keep these balances so low they wont even know who i am..

I am less than $65/1300 but what do you do when they report at random dates every month?....my statement isnt for another week in which it will be paid but they decide to report on the 15th......every month is different but auto pay is same day every month.....does this not happen to anyone else?....i cant be the only one, how to deal with reporting inconsistencies when you have auto pay?

[CorySoccer]

@dunn2500 Your guess is as good as mine!  I have the ability to pay off all credit card balances in full by the due date.  But if that's hurting my score then I have the ability to NOT do that, but if I do that, then I need to know if I should leave one balance roll over or should I just let the balances be reported to the CRAs but then pay them off as someone above mentioned.  

I can play the game however the game is played, but I don't know HOW the game is played.  It's impossible to figure out.

[Anonymous]

---

@dunn2500 wrote:

am gonna keep these balances so low they wont even know who i am..

I am less than $65/1300 but what do you do when they report at random dates every month?....my statement isnt for another week in which it will be paid but they decide to report on the 15th......every month is different but auto pay is same day every month.....does this not happen to anyone else?....i cant be the only one, how to deal with reporting inconsistencies when you have auto pay?

---

Each card is going to have its own reporting date. Often, the reporting date is the same as the statement date. However, this is not always the case and some financial institutions have specific days of the month they report on. US Bank and its credit processing company Elan FS report on the 30th of the month, regardless of statement date. To find the reporting dates you can either analyze your credit reports and attempt to determine if the report date is consistent with the statement date, or if there is a date each month the card report on. Alternatively, you can call the issuers of your cards and ask for your reporting dates.