How do potential creditors track your spending via credit report if you don't carry a balance on your cards?

[karina]

Most credit advice websites say to use your cards but pay off your balance so it shows your cards are still being used. They suggest this is somehow good for your credit. But if you pay off your balance every month, and the banks report a zero balance every month, how can agencies and potential creditors know you have used your cards at all? Or is this just so the issuing company doesn't lower your credit limits?

[dogszncatsz569]

Even though they report a zero balance, they also report "paid minimum payment" or "paid more than minimum" or "paid in full'. It was recommended to me to leave a very small balance to carry over on the card.

[SPIFIMAN1580]

Your not taking into consideration the difference between the billing date and the due date.

You can pay your cards off in full every month and still have a small balance that will be reported to the credit bureaus if you use your cards for everyday things that you would normally pay cash for.

I have done this for the last 3 years and raised my score over 150-point, never paid a penny in interest or fees and actually made several hundred dollars in cash back rewards.

Use the credit card companies to your advantage, use their money for free and actually make a profit. Not the other way around.

[SgtBigRed017]

As stated by another poster, your credit reports indicate monthly activity even if you pay in full every month.

However, even FICO states that paying off a card in full every month is not a good idea, especially if you use that card all the time.
Your FICO score is based on the information contained on your credit report at the time your score is requested.
On paper it appears this way. Your credit card issuer reports the outstanding balance appearing on your last billing statement to the credit bureaus and not that you paid in full. This means that the balance appearing on your credit report for an account will usually be the balance appearing on your last statement. So, even if you pay your balance in full each month, the additional charges made since your last payment will result in a new balance that will then be reported to the credit bureau the following month.
If you want to have your credit report to show a zero balance for a particular credit card account, pay your last billed balance in full and then make no additional charges to that account during the following month. The result will be a zero balance on your next statement, which will then be reported to the credit bureaus and appear as a zero balance on your updated credit report.

[tiffany373]

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