Low Balances Hurting My Score?

[BrokeStudent2010]

Hi - Can someone explain or direct me to a thread explaining if low balances hurt your credit score. I recently made a concerted effort to pay off most of my credit card debt. At first this helped my score jump from the 700s to the 800s. Now it seems that every time I pay off a balance my score goes down a little. I am monitoring my score using ScoreWatch and I'm baffled as to why my score goes down on the days that a balance pay off is reported, but it sometimes goes up when a new balance is reported. Can someone please help me understand this. Thanks. 

[RonM21]

If you are paying "all" of your cards down to zero and they each report that way, you'll lose points. You want at least one card to report a balance. It's better if your only reporting under 10% of your overall credit.

[BrokeStudent2010]

Ok, thank you. Right now I think that I'm using about 3% so that must be the problem. 

[Anonymous]

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@BrokeStudent2010 wrote:

Ok, thank you. Right now I think that I'm using about 3% so that must be the problem. 

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There is an "ideal" UTI% that seems to vary from one person to the next. It will usually be somewhere between 1% and 9%. Experiment by letting varying amounts report each month and see if you can discover your peak UTI percentage.

[BrokeStudent2010]

Thanks. I'll try that. 

[Anonymous]

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@BrokeStudent2010 wrote:

Thanks. I'll try that. 

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BTW, with a clean file the score variation once you get below 10% is usually not much more than a handful of points.