Score drop with 1 card reporting a balance

[MontegoMack]

I finally had BofA update my balance on a closed account to $0 on my EX report. I now only have 1 card reporting a balance, a rather high balance, but a balance nonetheless. Unfortunately, what's happened now is my score dropped over 25 points!  

I thought the ideal situation was to have only one card report a balance? I guess the bonus is that my utilization rate went down significantly , but I was hoping the lower utilization would boost my score. 

[DollyLama]

If your account was closed, it is the same as having 0 credit line, it will not bring down the utilization. Seems your 1 card reporting crossed a threshold in percentages on utilization to make it drop, <8.9 is the optimal but not zero, then <29, then <49 overall. 

[SouthJamaica]

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@MontegoMack wrote:

I finally had BofA update my balance on a closed account to $0 on my EX report. I now only have 1 card reporting a balance, a rather high balance, but a balance nonetheless. Unfortunately, what's happened now is my score dropped over 25 points!  

I thought the ideal situation was to have only one card report a balance? I guess the bonus is that my utilization rate went down significantly , but I was hoping the lower utilization would boost my score. 

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The ideal situation is to have one open card report a small balance while one or more other open cards report zero balance(s).

[Anonymous]

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@MontegoMack wrote:

I finally had BofA update my balance on a closed account to $0 on my EX report. I now only have 1 card reporting a balance, a rather high balance, but a balance nonetheless. Unfortunately, what's happened now is my score dropped over 25 points!  

I thought the ideal situation was to have only one card report a balance? I guess the bonus is that my utilization rate went down significantly , but I was hoping the lower utilization would boost my score. 

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It's hard for me and perhaps others to speculate because the following questions are unclear.

*  How many open credit cards do you have now? 

*  When was the BOA card closed?  Are you saying that this BOA card had been closed for several months, but that during that time it still had a positive balance listed?

*  You mention that your remaining card has a high balance.  Has that balance increased lately?

*  Is this remaining card an AU card or a charge card?

Bear in mind that alert-driven score updates do not necessarily give you a good way of concluding what caused the score change.  The "alert" text is the reason myFICO pulled your score again, but it might have changed for some other reason.

[MontegoMack]

I have 8 cards open. BofA has been closed since 2015 but had a balance owed since 2016 until I transferred the balance to my NFCU card. The mistake on BofA's part was that they still reported a balance to EX and I had that corrected and it showed updated with $0 on CCT this morning. The NFCU Platinum balance hasn't increased lately. 

[Anonymous]

That score drop sounds like what you'd expect if FICO perceived you as having no cards showing a balance, rather than one.  It could do that if the remaining card was an AU card, or if it was a charge card, or if the card had a huge credit limit (> 50k).

Otherwise it was probably caused by something else.  Paying down CC debt should a good thing as long as one still had a card witha balance and that balance is not increasing.

Work on paying down the existing card and you should be fine.

[MontegoMack]

I'm not sure where I indicated that it's an AU account, but that isn't the case. 

All of the cards are mine, as I'm not an AU on any account. I guess it's just a matter of patience while paying down the balance. 

Ugh.

[Anonymous]

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@MontegoMack wrote:

I'm not sure where I indicated that it's an AU account, but that isn't the case. 

All of the cards are mine, as I'm not an AU on any account. I guess it's just a matter of patience while paying down the balance. 

Ugh.

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You did not indicate that it is an AU account.

What you did do is create a thread expressing bafflement as to why it would happen that having one card reporting a balance could cause a score drop.  I was explaining that there were three possible scenarios where that could happen, all of which involve FICO perceiving the remaining card as if it had a $0 balance.  Since your initial post did not rule out any of those possibilities, I was running them by you.

[Anonymous]

CGID offers great insight above.

OP, if you have 8 open cards, I'd suggest letting any other single card report a small balance, say $10.  If your score goes back up the ~25 points that you recently lost, then for whatever reason the one card you have the balance on isn't being counted and thus you're currently being scored as if all of your revolvers have zero balances reported.

Your score, generally speaking, should be the same if you let 1, 2 or 3 cards report a small balance, as in either one of those scenarios you have > 0% of your cards reporting a balance but < 50% of your cards reporting a balance.  My point is that there's no harm in allowing a small balance to report on another one of your cards and it could potentially result in you grabbing those points back.

[medicgrrl]

Could it be that, because there was a balance, the CL was being factored in and OP's overall utilization has increased now?