FICO dropped for weird reason?

[drave199]

Alright so I paid my 2 credit cards down to zero a couple weeks ago. I got a couple alerts that myfico noticed that "my balances decreased by x amount" and all of my scores went up. Then about a week later, i got another alert saying "blah blah noticed a decrease of $5" and all of my scores DROPPED anywhere from 14 points to as much as 36 points?? Im not really sure where this $5 even came from? Reglardless, if it was a decrease, why would it drop my score? Is it maybe because i now have basically zero utilization of my available credit? Its a littler nerve racking because i was hoping to apply for an auto loan here in the near future. Maybe i shouldn't worry because all of my scores are still 768 and up but a couple of them WERE in the 800s. Any thoughts? Thanks

[Revelate]

---

@drave199 wrote:

Alright so I paid my 2 credit cards down to zero a couple weeks ago. I got a couple alerts that myfico noticed that "my balances decreased by x amount" and all of my scores went up. Then about a week later, i got another alert saying "blah blah noticed a decrease of $5" and all of my scores DROPPED anywhere from 14 points to as much as 36 points?? Im not really sure where this $5 even came from? Reglardless, if it was a decrease, why would it drop my score? Is it maybe because i now have basically zero utilization of my available credit? Its a littler nerve racking because i was hoping to apply for an auto loan here in the near future. Maybe i shouldn't worry because all of my scores are still 768 and up but a couple of them WERE in the 800s. Any thoughts? Thanks

---

Are all your revolving accounts $0 as you intimate?  That's a straight negative on every version of FICO in existence though haven't seen data for FICO 9 on it yet.

Let a small balance report on your next card that cuts a statement, and you'll recover the points if this is the case.

[RonM21]

+1 to above

If all of your cards hit 0% on the report there will be a drop.

[takeshi74]

---

@drave199 wrote:

Is it maybe because i now have basically zero utilization of my available credit? Its a littler nerve racking because i was hoping to apply for an auto loan here in the near future. Maybe i shouldn't worry because all of my scores are still 768 and up but a couple of them WERE in the 800s.

---

As stated above, if all your revolving accounts report 0 balances there is a hit for that.

With regard ot the auto loan, not all creditors use FICO 8's for auto loans so verify what your lender pulls before relying on FICO 8's.  Additionally, with FICO 8 best terms are generally offered in the 740-760 range.  Anything above that is just gravy.  Don't just obsess over the numbers.

If you are worried over the points then confirm that one of your revolvers has reported a balance before applying for the auto loan.  However, if you have FICO 8's around 768 you probably don't need to worry IMO.

[Anonymous]

Do the $2 trick where basically ~1% utilization will give you the highest FICO score compared to having 0% utilization.  Only one card should carry that balance provided all your report is clean.

[Anonymous]

Do you mean 1% utilization of a particular cards credit limit?  Or 1% on 1 card of all credit limits combined?  

[Anonymous]

The $2 card trick basically applies if your credit report is clean and get the maximum score.  You pick one card (rest being 0% utilization) and leave a $2 balance.  It's known to give you a higher score than if you were to have 0% utilization across the board

[SouthJamaica]

---

@Anonymous wrote:

The $2 card trick basically applies if your credit report is clean and get the maximum score.  You pick one card (rest being 0% utilization) and leave a $2 balance.  It's known to give you a higher score than if you were to have 0% utilization across the board

---

There's no magic to the $2 number btw; it could be any number below 9%.

[Horrace36]

Watching my FICO score has become an excercise in stupidity. I paid down one card from $148 to $0. My other cards have a balance of between 1% and 4%. On the paydown alone, my Experian score dropped 10 points. Given the pointless moves, and this is not the only one, it seems that Fair Isaac's algorithm is a bit willy nilly.

[Anonymous]

+2  Never leave a zero balance on your cc's.  Even a <1% is better.