Reply #93: Not using the credit doesn't automatically lower the score. [View All]

[Gormy Cuss]

I know in earlier FICO modeling it did but I believe that it's been corrected so that it's only a factor in a few cases, probably for those who have limited credit histories. Hard to say for sure because the model is proprietary.

In its description of how their model works, Fair,Isaac states:

In some cases, having a very small balance without missing a payment shows that you have managed credit responsibly, and may be slightly better than carrying no balance at all.

http://www.fico.org/ScoreBreakDown/AmountsOwed.aspx

Note the language: "some cases" and "may be slightly better." That admits carrying no balance is not considered a negative factor for everyone. Many "no balance" people I know have credit scores over 800.