My fico score dropped 27 points I paid balance down????

[Anonymous]

To all those saying there must be something else to cause the drop, you're wrong. I experienced the same thing, a drop of 18 points in transunion, 13 in equifax just because I cleared all my balances. The only thing that didn't changed (yet) is experian because they haven't posted their latest data. I'm expecting to logon next week and see the same drop in experian score. It's how FICO rewards people who are financial responsible, by tagging you as a big risk because you have enough money to NOT carry debt. The guy who designed their algorithm must have taken mathematics from Timbuktu university. Seriously.

[bdhu2001]

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@Anonymous wrote:
To all those saying there must be something else to cause the drop, you're wrong. I experienced the same thing, a drop of 18 points intransunion, 13 inequifax just because I cleared all my balances. The only thing that didn't changed (yet) isexperian because they haven't posted their latest data. I'm expecting tologon next week and see the same drop inexperian score. It's how FICO rewards people who are financial responsible, by tagging you as a big risk because you have enough money to NOT carry debt. The guy who designed their algorithm must have taken mathematics from Timbuktu university. Seriously.

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If you look in the forum, we're aware that having all your balance report $0 will create a drop in score.  However, the OP said he paid down balance, not paid it off. Also many of us pay off our balance every month. But for many cards if you pay on due date, it still reports a balance to the CBA. My FNBO is due on the 20th, but it reports to the CBA on the 6th.

[HiLine]

Here's something you should know.

FICO is a statistical model. Anybody that knows the least bit about statistics knows that statistics are not meant to be precise. FICO can predict future events and estimate quantitatively debt management habits. It cannot tell precisely what exactly is going to happen even the future; leave that to the psychic. A best guest estimate is still an estimate, which means every individual is going to vary to some degree from the prediction, some more than others. Credit scoring algorithms are useful when applied to a sufficiently large population, but largely inaccurate when applied to individual cases. While you may deserve a 20 points higher FICO score, someone else may deserve a 20 points lower, so on average, FICO is pretty good even though it predicts wrong for each of the two individuals. Doctors kind of function the same way; they prescribe the same drugs to two patients that show the same symptoms, and the drugs may work on one patient but not the other even though the prescription is 100% legitimate.

MyFICO is the consumer product division of FICO; people that work here are not those that are involved in building FICO scores. They do not have access to the FICO secrets; those that do are not allowed to spill them. Asking MyFICO representatives is little more helpful than asking people in this forum. They only have the knowledge that is available to the general population. Try asking a Comcast customer service representative about optical fiber technology and they'll be just as helpful.

Hope that helps.

[Anonymous]

I think the most accurate comments on this thread were those stating that fico measures ability to manage credit. 

That being said, I'm sure there are other factors into play with your score drop as long as you paid it DOWN and not OFF. 

[Anonymous]

I closed one of two installment loans. I paid my shared secure loan off an when it reported to Experian I lost 16 points. The next more I lost additional 23 points. That leaves me with a 39 point loss. REALLY! I still have the auto loan reporting it's 6th payment today. I'm headed back to my CU to get another shared secure loan. SMH.

[Anonymous]

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@CrankyDave wrote:

I've removed multiple derogs from my report in the past few months (confirmed in a recent 3-bureau report purchase), kept my credit cards paid in full for about two years, and paid off the balance of my car loan years early. The result? A 33 point drop since July. I've been at the new score for six weeks, so it ain't a temporary glitch. Try to tell me that that isn't effed up. To me, this sends the very clear message that debt is rewarded and having no debt is punished.

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Of course debt is rewarded! The whole system was established and is controlled by people who want to LOAN YOU MONEY. They make their livelyhood from charging you interest on that money.

Its really very simple - the FICO score is not a measure of how financially secure you are, or how financially smart you are, it is a measure of how GOOD you are at managing multiple debt accounts *without defaulting*. So when you pay off an account, you have less debt/accounts to manage and the assumption, from a pure statistical standpoint is that you are less capable than another person with more accounts. This is one reason why it advised to have multiple revolving accounts.

I do agree though that the whole system is seriously flawed.

[superj]

My situation is even stranger...I am looking to buy a new house soon so i decided to start paying down my balances to zero at the end of last year to raise my credit score..I decided not to use them at all until they report zero balance....I have 3 CC's reporting to all three bureaus...a Amex...Discover...and a Sheffield card...Zero'd out my Amex in November and on Dec 1st...i raised my cli from 6k to 18k...Zero'd my Discover card and raised the cli on it from 11.5k to 13k...my Sheffield revolver still showed a balance of 178.it has a cl of about 9k...On Dec' 2nd...my zero balance for my Amex reported which brought up my Experian from 774 to 778...My Equifax from 761 to 773...My Transunion went from a 748 to 758.....Got an alert on Jan 4th about my credit acct change...My Amex cli reported bring up my Experian 4pts to 778 and my equifax to 774...My transunion score remained the same...Got another alert 4 days later...My Discover balance reported zero and my new cli reported...My equifax went up 4 points to 778...My Experian went down to 774 and my Transunion still remains the same...Now i don't know what to do...smh

[Anonymous]

My fico score dropped 28 points in a week from one inquiry from 700 to 662 what can I do ?

[Anonymous]

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@Anonymous wrote:

My fico score dropped 28 points in a week from one inquiry from 700 to 662 what can I do ?

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First, that's a 38 point drop not 28.  Second, a single inquiry is not going to drop your score 38 points, 28 points, or even half that.  If your score dropped 38 points, it was for factors in addition to the inquiry.  Last, there's absolutely nothing you can do to combat the point drop from an inquiry (which is usually just a couple of points) except wait a few months for the sting to wear off.

[PETTWAYD6]

not buying it