Not true, based on everything I’ve ever seen for credit reporting.
Holding zero balances on accounts means you aren’t costing them money, which is better than defaulting on loans, not making payments, etc. but doesn’t mean you actually made them much money. People who never get into debt are generally not valuable customers for companies who make their money off interest.
People who require they keep book keeping/overhead for (aka keep active accounts), while not paying them money are actually costing them money.
If you show a past history of being able to cost them money, and then not actually doing so, or even making them money, that is certainly better than actually costing them money.
Aka, you held some debt for awhile, but made your payments and paid it off. Those are high credit score/low risk folks.
Having large outstanding credit balances (especially escalating ones) and only making minimum payments means you’re currently making them money, but are a relatively high risk of costing them money shortly in the future when you inevitably default. Which is a low credit score/high credit risk.
If you have high open credit, but rarely use it, they can’t tell if you’re high risk (you’re waiting to blow all your credit and leave the country) or low risk (would work yourself to the bone to pay every dollar back and would never overcommit) - but one thing is for sure, you aren’t actually making them money right now, and there is some risk you’ll max out your credit and disappear.
If you are paying ongoing interest and never default though, you’re the gravy customer for a CC company, as you’re be paying them waaaaay more interest than anyone else. So medium credit score, medium credit risk.
It’s a balancing act.
Someone with zero credit history is a complete unknown, which for various reasons is likely the highest risk of all, and why it’s also only slightly easier to get credit in that situation than if you were a serial bankruptcy machine.
Holding zero balances on accounts means you aren’t costing them money, which is better than defaulting on loans, not making payments, etc. but doesn’t mean you actually made them much money. People who never get into debt are generally not valuable customers for companies who make their money off interest.
People who require they keep book keeping/overhead for (aka keep active accounts), while not paying them money are actually costing them money.
If you show a past history of being able to cost them money, and then not actually doing so, or even making them money, that is certainly better than actually costing them money.
Aka, you held some debt for awhile, but made your payments and paid it off. Those are high credit score/low risk folks.
Having large outstanding credit balances (especially escalating ones) and only making minimum payments means you’re currently making them money, but are a relatively high risk of costing them money shortly in the future when you inevitably default. Which is a low credit score/high credit risk.
If you have high open credit, but rarely use it, they can’t tell if you’re high risk (you’re waiting to blow all your credit and leave the country) or low risk (would work yourself to the bone to pay every dollar back and would never overcommit) - but one thing is for sure, you aren’t actually making them money right now, and there is some risk you’ll max out your credit and disappear.
If you are paying ongoing interest and never default though, you’re the gravy customer for a CC company, as you’re be paying them waaaaay more interest than anyone else. So medium credit score, medium credit risk.
It’s a balancing act.
Someone with zero credit history is a complete unknown, which for various reasons is likely the highest risk of all, and why it’s also only slightly easier to get credit in that situation than if you were a serial bankruptcy machine.