Ugh. It happened!

[Selena1978]

I just don't get it. Why penalize me for paying off my bills. My Experian score dropped 12 points because I paid off my AVANT Personal loan. That sucks major!!!! I paid off all my credit card bills to lower my utilization and it's working against me. Major fail!

[SouthJamaica]

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@Selena1978 wrote:

I just don't get it. Why penalize me for paying off my bills. My Experian score dropped 12 points because I paid off my AVANT Personal loan. That sucks major!!!! I paid off all my credit card bills to lower my utilization and it's working against me. Major fail!

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If that was your only installment loan... that's what FICO does.

You can get the points back by doing the following:

Take out a $500+ savings account with Alliant Credit Union, then take a share secured loan secured by the savings account. Then immediately pay the loan down to 9% of the face amount of the loan and disable autopay.

[Selena1978]

Yes. That was my only installment loan. I will check out your suggestions. 

[Selena1978]

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@SouthJamaica wrote:

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@Selena1978 wrote:

I just don't get it. Why penalize me for paying off my bills. My Experian score dropped 12 points because I paid off my AVANT Personal loan. That sucks major!!!! I paid off all my credit card bills to lower my utilization and it's working against me. Major fail!

---

If that was your only installment loan... that's what FICO does.

You can get the points back by doing the following:

Take out a $500+ savings account with Alliant Credit Union, then take a share secured loan secured by the savings account. Then immediately pay the loan down to 9% of the face amount of the loan and disable autopay.

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I wonder if I can do this with Navy Federal. They don't have to check your credit do they? I already have excessive inquiries. 

[fltireguy]

NFCU doesnt care about inq..

[SouthJamaica]

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@Selena1978 wrote:

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@SouthJamaica wrote:

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@Selena1978 wrote:

I just don't get it. Why penalize me for paying off my bills. My Experian score dropped 12 points because I paid off my AVANT Personal loan. That sucks major!!!! I paid off all my credit card bills to lower my utilization and it's working against me. Major fail!

---

If that was your only installment loan... that's what FICO does.

You can get the points back by doing the following:

Take out a $500+ savings account with Alliant Credit Union, then take a share secured loan secured by the savings account. Then immediately pay the loan down to 9% of the face amount of the loan and disable autopay.

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I wonder if I can do this with Navy Federal. They don't have to check your credit do they? I already have excessive inquiries. 

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I don't know if other credit unions do it the same or not.

I just know that Alliant doesn't do any hard pull at all on these share secured loans.

I also don't know how other credit unions report the loans to the bureaus.

[Selena1978]

Oh. Well that's awesome. I've never heard of them but will take a closer look.

[Anonymous]

Here's a link that will give you all the guidance you need on the Alliant loan approach.  Just read the first 2-3 posts.

http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Adding-an-installment-loan-the-Share-Secu...

BTW, you mention two different things in your initial post:

     (1)  I paid off my AVANT Personal loan.

     (2)  I paid off all my credit card bills to lower my utilization and it's working against me

Those are very different things.  If #2 means that all of your cards are reporting a $0 balance, then that will hurt your score.  You will get a substantial boost by using one card, keeping the balance small, and keeping the other cards reporting at $0.

[Selena1978]

Thanks. I'm glad I came here because I put charges on one on my cards before the statement cut. I charged a little on 2 others.

[Anonymous]

If you don't have any particular need for credit in the near future (for example, a mortgage pre-approval, a car loan, etc.) then the simplest thing to do is to use your cards as you would naturally, as essential needs come up (gas, groceries, etc.).  Allow the cards to generate statements with a posiutive balance.  Then pay the "amount owed" on the statement in full.  Actually if you just set up auto-pay on your cards you don't even have to do that.  With this approach, you don't have to worry about how many cards are showing a positive balance.  There will always be at least one.

Then, if a really important need for credit comes up, pay All cards to Zero Except One (AZEO), which will get you some extra points.