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“You need to leave a 1% balance”! Is there any truth to this statement? (See attached screenshots)

Jordan23ww
Valued Contributor

“You need to leave a 1% balance”! Is there any truth to this statement? (See attached screenshots)

I'm always looking for ways to improve my credit profile. I've been following "All Zero Except One" (AZEO) since May 2020. I've seen my score grow from the 680's to what they are now 739 - 838.  So without a doubt I know AZEO does work.

 

Someone in another credit cards group I'm in keeps posting that leaving a $0 balance on cards isn't good, especially for over 5 months.They said at 6 months of reporting at $0 balance cards are marked as inactive on our credit reports, even if you've been using it and paying it  before the statement date. While I can't fully dispute their claim, I'm wondering if there is any truth to their statements.  I took a screenshot of what they've been sharing in this group repeatedly. 

Is it possible this is true and/or that this is better than AZEO? I feel like this isn't true. I remember one time I let 9 of my cards report a $5 balance. At the time I had 14 cards total. I got dinged on my MyFico 3 bureau report for having too many cards showing a balance. Even though my aggregate utilization was 1% and no individual card had a balance higher than 1% either.  


1A49B528-7605-4F22-BBB4-8B37E0804170.jpeg

 

12691187-3D47-4C35-9988-11A091C24BA5.jpeg

 

 


Message 1 of 13
12 REPLIES 12
cashorcharge
Senior Contributor

Re: “You need to leave a 1% balance”! Is there any truth to this statement? (See attached screenshot

I am going to "guess" that this disclaimer is bank specific.  Reason being, I have accounts that have not statemented a balance for 6 months, though see usage and have not received any adverse action, negative comments on my CB or reports of inactivity.  I seem to think there's more to the story than what your seeing or reading from another board/poster.  A bank may report that or not but I haven't experienced that either.  When my cards report at zero, it still shows payment(s) made and activity as identified via the statement in a given month.  There are gaps in reporting months where I know I had activity and the statement generated at zero though on CB's some show the activity when reviewing "Details" of an account and some don't.  

 

If there are specific banks that report this, it could be that I don't do business with them and therefore, haven't encountered what you're explaining.....

 

 

Message 2 of 13
Hoben02
Regular Contributor

Re: “You need to leave a 1% balance”! Is there any truth to this statement? (See attached screenshot

The only issue I've experienced is that for example Barclays reduced my credit line when I wasn't putting that much spend on certain cards

Chase (CSP,CF,CFU,southwest premier)
Barclay(jetblue, arrival, frontier)
Bofa(US pride, premium, travel, cash, alaska)
Citi(Premier, Double cash, Costco)
Fnbo(Mlife)
Amex(everyday, cash, Hilton)
Blockfi
Caesars rewards
Sofi
Gemini
Message 3 of 13
simplynoir
Community Leader
Mega Contributor

Re: “You need to leave a 1% balance”! Is there any truth to this statement? (See attached screenshot


@Hoben02 wrote:

The only issue I've experienced is that for example Barclays reduced my credit line when I wasn't putting that much spend on certain cards


CLD due to non-use is something that can happen, I think the OP is talking about something else here

 

@Jordan23ww, I'm going to echo @cashorcharge here in that that sounds like a piece of advice he got from a bank and they've been running with it ever since. If you're using the card it will still show activity on your credit report. It will only be inactive with no recent history on the account which is why when you use a card you haven't touched in awhile credit reporting websites like Experian will alert to a "dormant account now active" type of alerts. Even then it's not a bad thing CLDs or even closures notwithstanding

Message 4 of 13
Jordan23ww
Valued Contributor

Re: “You need to leave a 1% balance”! Is there any truth to this statement? (See attached screenshot


@cashorcharge wrote:

I am going to "guess" that this disclaimer is bank specific.  Reason being, I have accounts that have not statemented a balance for 6 months, though see usage and have not received any adverse action, negative comments on my CB or reports of inactivity.  I seem to think there's more to the story than what your seeing or reading from another board/poster.  A bank may report that or not but I haven't experienced that either.  When my cards report at zero, it still shows payment(s) made and activity as identified via the statement in a given month.  There are gaps in reporting months where I know I had activity and the statement generated at zero though on CB's some show the activity when reviewing "Details" of an account and some don't.  

 

If there are specific banks that report this, it could be that I don't do business with them and therefore, haven't encountered what you're explaining.....

 

 


@cashorcharge  Thank you soooooo much for this reply! This has been my experience also. Although only 1 of my cards reports a balance each month, all my cards get used monthly and my MyFico credit reports also indicate 'monthly usage. 

I have never gotten a negative factor, MyFico alert or comment on my reports since I've started doing AZEO in May of 2020 that suggest any kind of inactivity or penalty for AZEO.  I appreciate you taking the time to chime in! 

 


Message 5 of 13
Jordan23ww
Valued Contributor

Re: “You need to leave a 1% balance”! Is there any truth to this statement? (See attached screenshot


@Hoben02 wrote:

The only issue I've experienced is that for example Barclays reduced my credit line when I wasn't putting that much spend on certain cards


@Hoben02  I'm sorry to hear that this happened to you.  Hopefully they wind up increasing it again for you!  Thank you for sharing this info! 

 


Message 6 of 13
Jordan23ww
Valued Contributor

Re: “You need to leave a 1% balance”! Is there any truth to this statement? (See attached screenshot


@simplynoir wrote:

@Hoben02 wrote:

The only issue I've experienced is that for example Barclays reduced my credit line when I wasn't putting that much spend on certain cards


CLD due to non-use is something that can happen, I think the OP is talking about something else here

 

@Jordan23ww, I'm going to echo @cashorcharge here in that that sounds like a piece of advice he got from a bank and they've been running with it ever since. If you're using the card it will still show activity on your credit report. It will only be inactive with no recent history on the account which is why when you use a card you haven't touched in awhile credit reporting websites like Experian will alert to a "dormant account now active" type of alerts. Even then it's not a bad thing CLDs or even closures notwithstanding


@simplynoir  thank you so much for chiming in!  I think you may be on to something. I bet they did hear this from a bank or something.  After I made this post I saw they have made yet another post recommending people put 1% on every card and let it report. 

To make things more interesting on the post they also shared a link of an article about leaving 1% on your card from Nerd Wallet.  The article wasn't even addressing their point. It was talking about avoiding the $0 balance penalty you get for paying all cards to $0 and never letting anything report. Coincidentally the article went on the suggest people follow AZEO instead of leaving a $0 balance on each card. From the conversations I've had with them they don't believe in AZEO. Makes me wonder if they even read the article. 

I'm not surprised by their posts anymore that contradict a lot of the principles I've learned from reading posts on MyFico forums.  I've seen them make a lot of posts riddled with inaccurate info.  Usually I try to respectfully let them know what they have said isn't true. I don't want others following their incorrect advice.  

I sometimes just let it go and don't say a word because I don't want to offend them or make them feel like I'm attacking them.  At the end of the day I truly just want to help others improve their credit like posts from others have done for me.  Thank you again for your feedback! 

 


Message 7 of 13
simplynoir
Community Leader
Mega Contributor

Re: “You need to leave a 1% balance”! Is there any truth to this statement? (See attached screenshot

@Jordan23ww

 

I was going to comment earlier that they must be an outlier despite all the information and datapoints gathered on this forum alone regarding AZEO and how it works. Sounds like someone who read something that "worked" for them and they're going to stand by & defend it as a result. You are in the clear for sure

Message 8 of 13
Msafiri732
Member

Re: “You need to leave a 1% balance”! Is there any truth to this statement? (See attached screenshot

I always zeroed out my balances before the statement closing date and my scores stagnated. I tried leaving a 1% balance on my cards before the closing statement date and I saw a sizeable jump (double digits) in the scores. According to the credit bureaus, all my cards were 'dormant' because of the zeroes on my credit report.

Message 9 of 13
Jordan23ww
Valued Contributor

Re: “You need to leave a 1% balance”! Is there any truth to this statement? (See attached screenshot


@simplynoir wrote:

@Jordan23ww

 

I was going to comment earlier that they must be an outlier despite all the information and datapoints gathered on this forum alone regarding AZEO and how it works. Sounds like someone who read something that "worked" for them and they're going to stand by & defend it as a result. You are in the clear for sure


Yes indeed! They have gotten burned in the past by certain situations such as having  joint accounts with a spouse they have since divorced.  Their former spouse ran up the credit cards and it damaged their credit.

 

Now they have very strong opinions on things that are unique only to them, that most people won't ever experience.  They go off on anyone who  posts about adding someone as an authorized user or making their Apple Card a joint account. I think they have been scarred for life. Understandably so. I just wish they realize a lot of what happened to them is the exception and not the norm. 

 

  

 


Message 10 of 13
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