Score Dropped? Why?

[Tunahead]

twice this winter my FIco score dropped 10 points (each time) when I paid off a credit card balance in full, and well prior to the due date. The balance was posted after a purchase, posted and paid within 2 weeks each time

why would I be penalized, and not rewarded for this? 

Thanks.

[tufa4311]

Were all your balances $0 at that point? Did you have any revolving credit balances reporting during that period on your credit report? While no one can say for sure what the issue was having no balances reported is not a good thing. You always want one of your cards to report a balance of 1-10% of your overall credit limit on that card- credit scoring, including FICO, likes to see you using your credit and if you pay prior to the posting date and have a zero balance your utilization will be 0% - again, not a good thing.

[Tunahead]

Yes, I always pay my cards off 100% to a zero balance and also always prior to the due date. As a result my credit was 830 until this recent alert/change. Never realized that it is a good idea to keep a small amount on a card, but will try that and see how it works.

Thank you

[tufa4311]

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@Tunahead wrote:

Yes, I always pay my cards off 100% to a zero balance and also always prior to the due date. As a result my credit was 830 until this recent alert/change. Never realized that it is a good idea to keep a small amount on a card, but will try that and see how it works.

Thank you

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Just to clarify - it's not the due date but the posting date. The balance on your card on the date your bill is "posted" is the amount that will be on your credit report for that month. Find out the date each of your cards post, just ask them if you are not sure, and be sure to let one, just one, of your cards report a balance of 1-10%, then pay it off prior to the due date so as not to incur interest.

"In short, the lower a consumer's credit utilization, the better, but having a small balance is slightly better than having no balance at all," says Barry Paperno, consumer operations manager for FICO, the Minneapolis-based company that created the popular credit scoring formula.

[Anonymous]

Very Informative,Thanks for the knowledge guys!

[Anonymous]

Was it a chase card specifically? they will mid cycle update if you pay it down to 0. US bank reports last biz day of the month. So there can be some variations. Allowing 0 balance to show definitely has a negative effect. Tho with scores in the 830s, you have very little to worry about barringsomething negative popping up.