If I pay off my credit cards and keep them at a 0 balance, will that hurt (lower) my credit rating?

Question

Keeping the accounts open but never using the cards again.

Answer 1

0 balances will improve you fico scores because it improves utilization. You should use the card every couple of months just to keep it active. It is important to have a long established credit history. If for some reason the cards were closed for inactivity, it will affect you fico scores because you will be losing established history.

Answer 2

I have worked at a major credit card company for 12 years and I have never heard of one closing an account for inactivily. I have several credit cards that I never use, What that has caused is those companies to try really hard, such as offering good balance transfer rates and maybe a credit on my account for using it just once. Maybe some small banks close for inactivity.

Also, I never keep a balance and have a high score. I use one account for most daily charges for anything over $5 and pay the balance in full when ste statement arrives.

Answer 3

It will raise your scores.

If you close the cards, which I'm sure someone on here will advise you to do, that will lower your scores.

I would also suggest that you pull the cards out once every 6 months or so and make a small charge. When the statement cuts, pay in full. Buy a tank of gas, a hamburger at McDonalds or something. That will keep the cards from being closed for inactivity.

Answer 4

Keeping low balances helps your credit rating as debt ratio is a factor in computing scores. As was mentioned, you may want to check with your credit card company to see if they cancel inactive cards. Closing long term accounts can have an adverse effect on your scores, but not a significant one.

I also noticed someone mentioned FICO scores. Just for your information, FICO reports Equifax scores only. You have three scoring companies, TrueCredit for TransUnion and PLUS Score for Experian. Although you can obtain all three scores through FICO, the other two scores will not be accurate. The same is true for the other two scoring companies.

Answer 5

No, it won't hurt your credit score. Where it MAY hurt you after an extended period of time is with the cards themselves. Credit cards companies are in business to make money and they aren't making any money off of you if you don't charge anything. Depending on the company, some have cancelled cards citing lack of usage or non-use. If they cancelled the card, that would have an impact on your credit score if you have other outstanding debts. It would hurt you in the fact that, after they cancel the card, your credit ratio changes because your percentage of used credit vs. available credit obviously changes. If you pay off all your debts, look at items you pay by check and see of you could pay with them by credit card. I pay my Wall Street Journal by credit card rather than my bank account because it keeps one of my credit cards active. It may be at zero, but it is utilized.

Answer 6

if you are keeping your cards at 0, that means you're not in debt..

If you're not going into debt, then why do you care what your credit rating is? Do you plan on getting more credit cards that you don't use? Borrowing money for a car?

If you aint in debt, then you can save money and pay cash for everything!

Answer 7

no, it helps a lot. because of the component of credit score is the debt ratio. you could use the gas and paid it off every month

Answer 8

Won't hurt.. it'll help (positive payment history is still reported).

Answer 9

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good luck!