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New Visitor
Posts: 2
Registered: ‎08-12-2014
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Fico goes down every time I pay off balances

I'm curious why my Fico goes doen everytime I pay off balances.  I try to keep my cards at zero by paying them off every time I get paid.  I have noticed that If there is a small balance on my card my score will go up by 20 points or so, as soon as I pay off the balance my score will drop by 20 points.  Should I be carrying a small balance month to month?

Valued Contributor
Posts: 1,498
Registered: ‎03-10-2014
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Re: Fico goes down every time I pay off balances

[ Edited ]

Are you letting at least one account report a balance? If you're not, that's the issue. For maximum FICO optimization, all accounts but one should report a $0 balance. The singleton account should then report a [1$-10%) balance. If all accounts report a zero balance, you're not "utilizing" your credit. Thus, your score will drop. 

Established Contributor
Posts: 988
Registered: ‎08-08-2013
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Re: Fico goes down every time I pay off balances

Try carrying 1-9% on one card for optimal scoring. 

New Visitor
Posts: 2
Registered: ‎08-12-2014
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Re: Fico goes down every time I pay off balances

Thank you for your feedback, this is obviously the problem.  I will carry a small balance on one card.  Is there a card that works better for the balance than another?  I normally use my Chase Visa and My Macy's with AMEX.  I have had the Chase Visa for much longer, but both are "seasoned" cards.

Contributor
Posts: 127
Registered: ‎07-02-2014
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Re: Fico goes down every time I pay off balances

[ Edited ]

Huh, I should do the same. I'm guessing whatever card has the lowest APR would be the best to use.

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Frequent Contributor
Posts: 457
Registered: ‎01-27-2014
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Re: Fico goes down every time I pay off balances


flawesome wrote:

Huh, I should do the same. I'm guessing whatever card has the lowest APR would be the best to use.


You need not carry a balance  and pay interest to show one card >0% utilization , so in each billing cycle it can be any card , which you want to show a balance and pay off before the due date.


         
FICO08 12/2014EQ 777TU 799EX 767
 
    
Established Member
Posts: 21
Registered: ‎06-04-2016
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Re: Fico goes down every time I pay off balances

I'm having the same problem now. I have tried this for the last two months and my scores keep dropping.
Valued Contributor
Posts: 4,205
Registered: ‎04-11-2016

Re: Fico goes down every time I pay off balances

Keep in mind that letting a balance report in order to get those ~20 points does not mean you need to "carry" a balance.  "Carrying" a balance suggests having to pay interest, when simply letting a balance report doesn't mean that any interest needs to ever be paid.

Valued Contributor
Posts: 2,328
Registered: ‎03-20-2014
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Re: Fico goes down every time I pay off balances


geisler wrote:

Thank you for your feedback, this is obviously the problem.  I will carry a small balance on one card.  Is there a card that works better for the balance than another?  I normally use my Chase Visa and My Macy's with AMEX.  I have had the Chase Visa for much longer, but both are "seasoned" cards.


Hey geisler, maybe you don't know but Chase will report your card again if you pay to zero.

 

Let's say you buy something with the card and have a $10 balance and it closes on the 15th, you let that report on the 15th but pay it to zero on the 20th, Chase will report again your card on the next few days with $0 balance. If your other card is $0 too, then your score will drop around 20 points.

 

You need to use it for something, let it report, use it again and pay last month's balance before due date to not pay interest. This is no carrying a balance, just reporting a balance. Carrying a balance is when you do not pay the last statement balance in full by due date.

 

Valued Contributor
Posts: 1,809
Registered: ‎04-01-2015
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Re: Fico goes down every time I pay off balances


newhis wrote:

geisler wrote:

Thank you for your feedback, this is obviously the problem.  I will carry a small balance on one card.  Is there a card that works better for the balance than another?  I normally use my Chase Visa and My Macy's with AMEX.  I have had the Chase Visa for much longer, but both are "seasoned" cards.


Hey geisler, maybe you don't know but Chase will report your card again if you pay to zero.

 

Let's say you buy something with the card and have a $10 balance and it closes on the 15th, you let that report on the 15th but pay it to zero on the 20th, Chase will report again your card on the next few days with $0 balance. If your other card is $0 too, then your score will drop around 20 points.

 

You need to use it for something, let it report, use it again and pay last month's balance before due date to not pay interest. This is no carrying a balance, just reporting a balance. Carrying a balance is when you do not pay the last statement balance in full by due date.

 


Interesting - so Chase reports mid cycle. I don't have a chase card. Do other banks such as Citi or BOA do this?

 

I generally pay balances a few days before due date and don't recall having this happen but, I admit I don't watch that closely.

Fico 8: .......EQ 850 TU 850 EX 850 (3/2017)
Fico 9: .......EQ 850 TU 850 EX 850 (3/2017)
Fico 4 .....:. EQ 809 TU 823 EX 830 (3/2017)
VS 3.0:...... EQ 832 TU 832 EX 832 (3/2017)
Fico 8 BC:. EQ 887 TU 899 EX 900 (3/2017)
Accounts:.. Old 32 yr, Young 5 yr, AAoA 18-19 yr.

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