4.03.2010

FICO score on "not using credit"





What happens when you have zero CC debt .... FICO score goes down. Makes no sense to me!


Posted by Jim Peet at 4/03/2010 08:00:00 AM

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4 comments:

  1. Daniel StahlApril 3, 2010 at 6:37:00 PM CDT

    Jim, you would know. I have heard, and this sounds like it, that if you don't have a balance on your CC bill, it is as if you aren't using it. Is that true?

    What about this. I use citi, and every bill I have has a balance, but they don't charge interest on it, till sometime after the bill. I usually pay it off within a week or so after the bill. Is that still considered carrying a balance?

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  2. Jim PeetApril 3, 2010 at 7:03:00 PM CDT

    I think that's what happening to me. We watch the CC very closely (every day). We know when the month closing date is. So lets say I spend $ 1000 per month on the CC. I always pay it off before the statement closing date. Then went I get the statement it might have a balance of minus 50 to plus 50. So it looks like I am not using it when I am actually using it a lot

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  3. Daniel StahlApril 5, 2010 at 8:05:00 AM CDT

    So then for me, I am actually carrying CC debt, as far as FICO is concerned, because my statements actually have a balance. Citi must calculate interest differently because I am never hit for interest.

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  4. Bike BubbaApril 5, 2010 at 8:14:00 AM CDT

    Jim; well said. Just keep in mind that your FICO score is not about how credit-worthy you are. It tells lenders how likely you are to pay interest, and hence it's kinda like a volume discount at a bar.

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