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Question By
Tjent1

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Can someone explain why maintaining a zero balance is not optimal?
Like many people, I have certain cards, usually store cards, that are dormant for long periods of time with a zero balance. I've heard that for credit utilization purposes these zero balances don't help me as much as they should. Why is this? and should I use them periodically (and pay off in full after statement is issued)?

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What most people don't realize is that the credit scoring system isn't designed to reward us for being highly responsible with our money. It's designed to tell potential lenders how profitable we are likely to be as customers. When we don't use our cards, the card issuers actually lose money maintaining our accounts. Therefore, paying off loans or keeping zero balances on cards is (rather mind-bogglingly) considered a negative. It's a darned shame, but there it it.

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Reply by
Clairissa

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And yes, you should indeed use them every few months. Paying them off after the statement date is good. (Paying them off before the statement, not so good.)

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Reply by
Sumflow

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Clairissa :> Paying them off after the statement date is good. (Paying them off before the statement, not so good.)<

Why?

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yes use them periodically 0% is ok for one or 2 months in a row but after that it begins to hurt your score...take my experience for example i went from 10% to 0% for 2 months and the first month my score skyrocketed 23 points 

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Reply by
Sumflow

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No other factors?

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