What are the FICO downsides to going TOTALLY ZERO?

[Anonymous]

If I have zero balance showing on all my accounts through the entire year, will this impact my FICO negatively?    i.e., I PIF all of my cards before the statement cuts?

Does the FICO score misinterpret that has non-use of credit? 

The only open debt I have presently is revolving.   All other forms of debt are paid/closed $0 bal. 

[MarineVietVet]

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@Anonymous wrote:

If I have zero balance showing on all my accounts through the entire year, will this impact my FICO negatively?    i.e., I PIF all of my cards before the statement cuts?

Does the FICO score misinterpret that has non-use of credit? 

The only open debt I have presently is revolving.   All other forms of debt are paid/closed $0 bal. 

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I have read different results for doing this. Some people say they might lose a few points for going all zero and others see no reduction. Even if it dings your score a few points if you don't plan on applying for any new credit it doesn't matter at all IMO.

From a BK years ago to:
7/09 TU-742 EQ- 779
8/09 TU-765 EQ- 783
9/09 EX pulled by lender 802

You can do the same thing with hard work.

[Anonymous]

I opened an account 8 months ago but my AAoA is 5yr, oldest 10yr.    I PIF weekly online all the time on my rewards cards, so I could preserve those few points by PIFing   Balance - $1, then PIF the dollar off after it reports.

 I was thinking going totally zero just as a habit as a good idea because if I obsess on that, it will make my other goal of no-app seem easy by comparison.  

If I want some of those points back right before mortgage time, I'll just let $1 appear on one of my accounts [or do you have to do this for all your revolving accounts?]

[Anonymous]

As little as $1 on one revolving account will do it. The score penalty for doing all zeroes is also very minor depending what your scores are I really wouldn't worry about it one way or the other.

[haulingthescoreup]

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PhillyGuy215 wrote:

If I have zero balance showing on all my accounts through the entire year, will this impact my FICO negatively?    i.e., I PIF all of my cards before the statement cuts?

Does the FICO score misinterpret that has non-use of credit? 

The only open debt I have presently is revolving.   All other forms of debt are paid/closed $0 bal. 

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You will probably lose some points for having all $0 reporting on Equifax. They can be regained the next month by letting one account report, if you are planning on apping and you need every point you've got. If your TU score is high-ish, I think it was above 750 or so, you won't be penalized. And of course, who knows what would happen with EX these days.

The "through the year" bit doesn't matter. The FICO scores are just a snapshot of what's on your credit reports at that moment. FICO doesn't have a "memory" for what you've done over previous months, other than lates, previous high balances, and so forth.

Although we don't necessarily see it on our reports (I think we can only see this on the full Experian report), lenders do report whether the card was used during the previous month, even if the reported balance is $0.

So it's completely up to you as to whether you want to let none report a balance, all report a balance, or just one or some. With the exception of American Express, which has a built-in 4-week lag, and some of the crummier cards that don't always want to update new balances, you can change what's showing within one billing cycle.

Every now and again, I accidentally wind up with $0 reporting. TU goes up and EQ goes down. Other times, I accidentally have two accounts reporting. I just lost 2 points on EQ for this; don't know what, if anything, TU did.

Again, this is very reversible if you have an app coming up and want to squeeze out a few more points.

[Anonymous]

I have been reporting 3% on one card and 0 on all others.

Two months ago, all accounts reported 0 - so no balances reporting. No point movement. 

This month, I reported 8% on one card and 0% on all others.  Again, no point movement.  This is myfico EQ score. 

Go figure.

[Anonymous]

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@Anonymous wrote:

I have been reporting 3% on one card and 0 on all others.

Two months ago, all accounts reported 0 - so no balances reporting. No point movement. 

This month, I reported 8% on one card and 0% on all others.  Again, no point movement.  This is myfico EQ score. 

Go figure.

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That's actually kinda strange. Did you pull the reports or rely on SW? If you saw the reports did the negative reasons (codes) change?

[Anonymous]

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@Anonymous wrote:

If I have zero balance showing on all my accounts through the entire year, will this impact my FICO negatively?    i.e., I PIF all of my cards before the statement cuts?

Does the FICO score misinterpret that has non-use of credit? 

The only open debt I have presently is revolving.   All other forms of debt are paid/closed $0 bal. 

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You can get hit with FICO Code #24 (No recent revolving balances) or FICO Code #29 (No recent bank card balances).  If you let a bank/national credit card company report a balance, you'll avoid both of these hits.  The amount can be small - this just demonstrates good credit management to FICO.  Even though our credit accounts know we're active even with a zero balance reporting, FICO will need a small balance reporting on occasion to get the message.

Congrats on your excellent PIF'ing.