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Paying down credit card balances

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Anonymous
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Paying down credit card balances

My credit cards were maxed out and 2 if them were actually over their limit. I paid down the balance by $500 of the $2,000 owed and my credit score actually went down 17 points. Can anyone tell me why this happens?
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Anonymous
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Re: Paying down credit card balances


@Anonymous wrote:
My credit cards were maxed out and 2 if them were actually over their limit. I paid down the balance by $500 of the $2,000 owed and my credit score actually went down 17 points. Can anyone tell me why this happens?

Your score went down because of something completely unrelated to you paying down the $500.  Paying down balances will never cause your score to drop unless you report all zero balances across all of your revolvers at the same time, which you did not do.

 

What were your total combined balances relative to your total combined limits before/after your paydown?  Depending on if you crossed a threshold, it's possible that you actually improved your score slightly with your paydown... which would mean it's diluting the negative scoring impact of whatever else caused your score to drop.

Message 2 of 4
Anonymous
Not applicable

Re: Paying down credit card balances

There's a chance that you are being "balance chased."  This means that as you pay down your CC debt your panicky creditors are lowering your credit limits along with it, since you scared them by running up your debt so high.  The way to find out if that is true is to first know what your credit limits were, and then to periodically pull your reports to see whether the limits have changed.

 

Credit Karma will give you new reports as often as once per week.

 

Assuming that no balance chasing is going on, then it just means that the score drop was going to happen anyway, perhaps a delayed result of your dangerously high utilization.  There is absolutely no chance that paying your CC debt down could have caused your scores to go down.  I am not saying that the scores did not recently go down, but reducing your CC debt did not cause it.

 

Best approach for you is to forget about your scores for a while and work on paying off all of your CC debt.  Micromanaging your score during that time won't help and will only freak you out.  Trust that your score will be much better when you have paid off your debt.  And of course many other things will be much better too, like the huge amount of interest you are paying.

Message 3 of 4
rmduhon
Valued Contributor

Re: Paying down credit card balances

Where are you getting the scores from?
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