3

Possible Duplicate:
How will going from 75% Credit Utilization to 0% Credit Utilization affect my credit score?

I've read in a few places some statistics to indicate that people with zero CC balance have a lower average credit score than someone who maintains a low, yet nonzero, balance. What is the mechanism of this, if it is actually a real effect? Another possibility could be that those with zero balances don't use credit and don't have a significant credit history, leading to a lower score.

Community
  • 1
Bigbio2002
  • 1,299
  • 3
  • 13
  • 26
  • That Credit Karma graph is one of the places that I was referring to. The question is, WHY would it cause a lower credit score to have 0% CC balance, if it even occurs at all? – Bigbio2002 Nov 20 '12 at 21:36
  • I answered both questions, although, I admit, the "why" is not so simple. I believe that each factor involved in creating the score was correlated to default rates, and therefore, the 0% was deemed riskier than the range of 1%-19%. – JTP - Apologise to Monica Nov 21 '12 at 01:57

1 Answers1

0

I can't swear that it's real but one of those pseudo-credit scores you find online considered it a ding on my credit that my utilization was 0%. They were being stupid about it, though--it's not actually 0%, just less than 1%.

Loren Pechtel
  • 5,068
  • 1
  • 21
  • 20