Small charge hits my score hard

[Anonymous]

Looking for anyone that can explain this to me.  I have a credit card with a $500 limit.  In decmeber I had about $400 charged on the card.  I paid it off early January, and my scores jumped up 41 points.  

But then I had a $30 charge come up on my card and my score immediately dropped 45 points, leaving me with a worse score than I had with a $400 balance.  

How does this make sense?  I thought carrying a small balance would help my score. I know that it takes time, but why would such a small charge hit my score so hard?

[Anonymous]

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@Anonymous wrote:

Looking for anyone that can explain this to me.  I have a credit card with a $500 limit.  In decmeber I had about $400 charged on the card.  I paid it off early January, and my scores jumped up 41 points.  

But then I had a $30 charge come up on my card and my score immediately dropped 45 points, leaving me with a worse score than I had with a $400 balance.  

How does this make sense?  I thought carrying a small balance would help my score. I know that it takes time, but why would such a small charge hit my score so hard?

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If you paid it in early January and your scores went up then it must have reported and that's how you know your scores went up right? So now it's mid January and you say your scores went down so are you saying it reported again for a second time in January? You should only be able to see one score change per month relating to the balance on that card.  Something else must have made the score go down. Maybe a derog hit your report. Is this your only card?

[AndySoCal]

Check your score  reason on the two reports (41 point increase and 45 point decrease) the score reasons are in order of impact. This will help find out the reason(s) for the change. I doubt the $35.00 charge is the culrpit.

[Anonymous]

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@AndySoCal wrote:

Check your score  reason on the two reports (41 point increase and 45 point decrease) the score reasons are in order of impact. This will help find out the reason(s) for the change. I doubt the $35.00 charge is the culrpit.

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Do you think he's talking about his scores from the monitoring here? Sounds like Fako score fluctuation to me. If that's the case and he's monitoring from here then that might be where the confusion is coming from. He might have gotten an alert that his score dropped 45 points for a balance change when in reality a balance change caused an alert but the score change was from something else. Happens all the time. People getting 40 points for inquiries and stuff like that.

OP, either way your score should only change once a month in relation to a particular account. CCC's don't report every time you charge something and cause a score change. If you paid your December balance down in early January and it REPORTED as such and you got a good boost in score you wouldn't see a score change from that card until February when your statement cuts again. Unless they're doing a mid cycle report which is unlikely and even then $30 on a $500 limit wouldn't change the score much, if at all. How many accounts do you have? 

[Anonymous]

I have the service here at myfico.com.  The reason listed on the alerts was related to this card.  I didnt think they would update more than once a month, but they did.  I dont have any other cards and no other changes have been made to my credit report.  No new accounts, no inquiries, nothing on my credit report has been changed except the balance on this card. 

Dont know how this makes sense but that is what is going on.  Any insight to this would be appreciated. 

[Revelate]

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@Anonymous wrote:

I have the service here at myfico.com.  The reason listed on the alerts was related to this card.  I didnt think they would update more than once a month, but they did.  I dont have any other cards and no other changes have been made to my credit report.  No new accounts, no inquiries, nothing on my credit report has been changed except the balance on this card. 

Dont know how this makes sense but that is what is going on.  Any insight to this would be appreciated. 

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TL;DR - Get two more cards .

1 card you're damned if you do and damned if you don't use it unfortunately, and we have very few people that have one card... and likely virtually no data on FICO 8 on how balances of varying degrees affect it.

Where you get stuck is under the current algorithm, if all your cards are reporting a balance, that's a big negative, and if all of your cards are reporting $0, that's a negative as well.  That holds for N cards where N>2 at least, people have tested up to 8 cards exhaustively on it.  

What's your score incidently?  The bigger your score, the wider your swings too and if you have a very thin file which sounds like you may, comparitively minor changes will have a larger impact.  Longer term you want a minimum of 3 cards to optimize scoring as we understand it, and for any serious underwriting (like a mortgage) you typically want 4 or more tradelines anyway.

[Anonymous]

Awww, that seems to make sense.  In my case it seems im more damned if I do.  I will have to look into getting a second card, as it just so happens I received a pretty good offer in the mail yesterdaay.  

My score was at 660, but with the drop it is down to 615.