"No recent revolving balance" : 16 point drop!

[SevenYearItch]

I ordered my TransUnion FICO score from myfico.com yesterday. My score dropped from 736 to 720 in less than one month.

 

The only difference in the credit report? No balances on my revolving accounts.

 

I actually have balances on two cards right now, but those balances haven't appeared on the report yet. I usually have a balance every month on at least one CC, but I pay off the balance(s) in full every month. This time, there just happened to be no balances showing on the TU report.

 

As a result, I lost "You have a low proportion of balances to credit limits on your revolving/charge accounts" as a positive scoring factor and picked up "You have no recent revolving balance information being reported" as a negative scoring factor.

 

It's no big deal to me. I just think it's funny that I'd lose 16 points because it just so happens, due to the timing of my recent charges and pay-offs, that I have no balances showing on my credit report.

 

I guess this spokesman from Fair Isaac wasn't lying:

 

http://www.afreereport.com/CreditScoringSecrets.htm

"Everyone would agree that paying off revolving debt is a good thing," says Fair, Isaac spokesman Craig Watts. But all things being equal, "having a little balance on a line of credit is a little better than no balance at all," he says. A zero balance provides less information to the FICO scoring model about one's ability to manage debt than keeping a small balance.

 

By the way, Providian supposedly checks my TU report on the 15th of every month. That was one of the reasons that I wanted to see the TU FICO score from myfico.com yesterday. I'll be able to compare the FICO scores from Providian and myfico more fairly that way. [i strongly suspect that Providian provides a CC-enhanced FICO score because my FICO scores from Providian have been 20 points higher than myfico.com over the last two months. Providian usually doesn't post the scores until the 25th, so I'll have to wait a few more days to compare the scores.]

[Cascades]

For the highest FICO score, you want to keep a balance between 7-10%. This is what a lot of people have said on here.

 

Cas

[onetwo]

Cardholders who don't carry balances aren't profitable :roll:

[SevenYearItch]

I hate to pay interest. However, the next time that I apply for a new auto loan or whatever, I'll probably carry a small balance on my credit cards to give the score a little boost.

 

Then I'll pay the cards off in full again.

[catnap1972]

I hate to pay interest. However, the next time that I apply for a new auto loan or whatever, I'll probably carry a small balance on my credit cards to give the score a little boost.

 

Doesn't work that way.

 

You'll get dinged for having balances on too many accounts (no matter how small the $ amount).

[GEORGE]

F.I.C.O. WAS NEVER INTENDED FOR THE BENEFIT OF THE CONSUMER

[faztcobra]

You can pay your accounts off each month, just be sure to leave ONE card with a balance when the billing cycle closes. $50-$100 works.

[Kona]

I hate to pay interest. However, the next time that I apply for a new auto loan or whatever, I'll probably carry a small balance on my credit cards to give the score a little boost.

 

Doesn't work that way.

 

You'll get dinged for having balances on too many accounts (no matter how small the $ amount).

 

Looking at my reports, the issue they list first as most important in score impact is utilization. The next one is number of accounts with balances being excessive in that they exceed the national average of four.

 

The first one is something I am working on; I'm not overly concerned about the second one. I have 7 accounts with balances, some of which are used as bt sources to keep the individual utilization down.

[Ssdflenner]

When I pulled MYFICO the other day I had balances on my CC's. I did the simulator and If I paid EQ off in full I gain 20-60 points, but if I pay TU in full it only shows 0-20 point increase. Now if I leave a $100 balance on EQ I get a 0-20 point increase and if I leave $100 on TU I get a 30-60 point increase.

 

So it would seem that TU weighs heavily on leaving a very small balance on a card and EQ weighs more at paying them off inj full. HTH

[SevenYearItch]

I hate to pay interest. However, the next time that I apply for a new auto loan or whatever, I'll probably carry a small balance on my credit cards to give the score a little boost.

 

Doesn't work that way.

 

You'll get dinged for having balances on too many accounts (no matter how small the $ amount).

 

I knew that, but thanks for the reminder. I should've indicated that I would carry a small balance on one or two of my cards.