While a 0% utilization is certainly better than having a high CUR, it's not as good as something in the single digits. Depending on the scoring model used, some experts recommend aiming to keep your credit utilization rate at 10% (or below) as a healthy goal to get the best credit score.
Anything over 1% (perhaps 2% as well) is seeing as utilization creep. So the higher it is the more effect it'll have on your credit score. 1-7.9% seems to be the ideal range, with 1% being optimal.
So which scenario is worse — not having any credit or having bad credit? “Neither is good,” says Greg Reeder, CFP, a financial advisor with McClarren Financial Advisors in State College, Pennsylvania. However, “A poor credit score is worse,” he says. “If you have no credit, you can start from the ground up.
If you're new to credit, it might take six months to a year to hit a respectable score of around 700 with FICO® or VantageScore® models.
Even better, just over 1 in 5 people (21.2%) have an exceptional FICO credit score of 800 or above, all but guaranteeing access to the best products and interest rates.
A FICO® Score of 650 places you within a population of consumers whose credit may be seen as Fair. Your 650 FICO® Score is lower than the average U.S. credit score. Statistically speaking, 28% of consumers with credit scores in the Fair range are likely to become seriously delinquent in the future.
Of course, you can live without a credit score; it's not oxygen. And credit reports and scores are not always easy to live with. It's important to monitor them, and sometimes you may have to dispute errors you find.
Lower utilization rates are better for your credit scores, and 30% could be better than 50%, 70% or 90%. However, a lower utilization rate might be even better for your credit scores. People in the highest credit score range tend to have utilization rates in the single digits.
What is the highest credit score possible? To start off: No, it's not possible to have a 900 credit score in the United States. In some countries that use other models, like Canada, people could have a score of 900. The current scoring models in the U.S. have a maximum of 850.
It's a good idea to pay off your credit card balance in full whenever you're able. Carrying a monthly credit card balance can cost you in interest and increase your credit utilization rate, which is one factor used to calculate your credit scores.
To sum things up, the answer is no, it isn't bad to have a zero balance on your credit cards. In fact, having a zero balance or close-to-zero balance on your credit cards can be beneficial in many ways.
Making on-time payments to creditors, keeping your credit utilization low, having a long credit history, maintaining a good mix of credit types, and occasionally applying for new credit lines are the factors that can get you into the 800 credit score club.
Late or missed payments can cause your credit score to decline. The impact can vary depending on your credit score — the higher your score, the more likely you are to see a steep drop.
Experts suggest keeping credit utilization at less than 30 percent to maintain good credit, however, those with excellent credit keep it below 10 percent. Lower your credit utilization by paying off revolving debt, requesting a higher credit limit, performing a balance transfer or applying for a new credit card.
(Just in case you're wondering: Yes, Dave Ramsey's credit score is indeterminable. And he wears that accomplishment with pride!)
VantageScore and FICO scores range from 300 to 850, making 300 the lowest credit score possible. While credit scores as low as 300 are possible, most consumers have scores above 700.
A credit score of 999 from Experian is the highest you can get. It usually means you don't have many marks on your credit file and are very likely to be accepted for a loan or credit card. However, a high credit score doesn't guarantee your loan will be accepted.
While older models of credit scores used to go as high as 900, you can no longer achieve a 900 credit score. The highest score you can receive today is 850. Anything above 800 is considered an excellent credit score.
The average FICO credit score in the US is 717, according to the latest FICO data. The average VantageScore is 701 as of January 2024.
Overall, Credit Karma may produce a different result than one or more of the three major credit bureaus directly. The slight differences in calculations between FICO and VantageScore can lead to significant variances in credit scores, making Credit Karma less accurate than most may appreciate.