Which penalty is worse? [Number of accounts with balances or all accounts with zero balance]

[Blodreina]

What does Fico 08 penalize more, anecdotally?

[lg8302ch]

---

@Simba501 wrote:

What does Fico 08 penalize more, anecdotally?

---

I would say that heavily depends on the amount of your balances    Sorry I could not resist....but I know what you mean but unfortunately do not have the answer. You can do a small test if you have a monitoring service that provides Fico scores.  I have done my tests but it looks that I forgot that one.  I have done 1$ reporting on all 8 accounts and  0$ on 7 accounts  with 8$  balance on 1 account. It did not come to my mind to test all accounts with 0 balances. I will remember when I repeat the tests next time.

[gdale6]

Number of accounts with balances. The amount of the balance is irrelevant (for number of accounts calc) the Fico ding is the same for $1 as it would be for one that is higher. This is the way I understand it to be. The ding for all at 0 isnt that bad can be a few points to 20 from what I have seen in posts lately.

[jamie123]

You will lose 3 to 5 points for each credit card more than 1 that reports a balance. You will also receive a "heavy use of credit" ding if 50% or more of your cards report a balance. That means if you have 7 CCs and 4CCs report a balance you get an extra ding.

Most people will lose anywhere from 5 to 20 points for all cards reporting $0.

[lg8302ch]

I will do a 0 balance on all but 1 account on my next reporting and honestly doubt that it will make much of a difference for me with the Fico 8 model. With the previous model I did loose 40 points for reporting too many accounts with a balance but with the EQ Fico 8 it does not seem to make much of a difference for me.  You got me curious now and I will see what will happen by paying down to 0 before reporting. If above info is right that should take me across the 800 limit on EQ

[RobertEG]

Both are considerations under the same factor, which is percent of accounts reporting a balance.

Number of accounts with a balance divided by number of accounts is the ratio.

What Fair Isaac has disclosed is that all accounts should not show zero.

From there, the number of accounts with a balance appears in both the numberator and denominator, with the denominator also including no. of accounts with no balance.

Thus, math dictates that the higher the number of accounts, the less impact having one carry a balance will have.