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Why my credit went down from a $0 balance report?

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Anonymous
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Why my credit went down from a $0 balance report?

I got my Capital One secured mastercard about 2 months ago with a credit limit of $301. The first month they reported, my credit score (reported $49 balances) went up a decent sum (about 60-70 points). The next month they reported a $0 balance and my credit score went down about 10 for each. Note that both of these I've been paying off every month on time the full amount. Also this is my first credit card, can anyone expalin these occurrences?

Message 1 of 7
6 REPLIES 6
Anonymous
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Re: Why my credit went down from a $0 balance report?

It sucks, right? You would think that PIF a balance would be a good thing. Unfortunately, it's not. Always allow one credit card to report a balance less than 10% utilization. If you are being charged interest. allow like $5 to report. The FICO model is very sensitive. I hope this helps and keep up the good work!!!

Message 2 of 7
Anonymous
Not applicable

Re: Why my credit went down from a $0 balance report? It

Yep. If you have 0% util is negative. Keep it between 1% - 7% for the best result (according to a myFico educational poster I saw the other day).

Message 3 of 7
CribDuchess
Established Contributor

Re: Why my credit went down from a $0 balance report?

Agree with the other posters.  Any time I have zero balances report across all accounts, it costs me 9 or 10 points.

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Message 4 of 7
Anonymous
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Re: Why my credit went down from a $0 balance report?

Is there a certain timeframe i should pay my balance so its not reported as $0? Like so many days after my statement?

Message 5 of 7
gdale6
Moderator Emeritus

Re: Why my credit went down from a $0 balance report?


@Anonymous wrote:

Is there a certain timeframe i should pay my balance so its not reported as $0? Like so many days after my statement?


To get on track, pay your statement balance by the due date to avoid interest charges then pay your card down to less than 10% of its CL on or before the statement cut date, once you have done this then be sure to pay the small statement balance by the due date and again pay it down on/before the statement cut date. You want all your other revolvers reporting 0 but this doesnt mean you cant use them you just again want to pay them off on/before their statement cut date. Once you understand this is really easy to do.

Message 6 of 7
Anonymous
Not applicable

Re: Why my credit went down from a $0 balance report?

CC Companies most often report the last day of the billing cycle.  So pay a bit more than the most you think it will be and submit the payment 4 days before the end and they should report $0.  Ask your issuer when they report if you have any doubts.

 

If you want to ensure it won't be $0, by way of contrast, be sure that you pay at least a few days after the statement cuts.

Message 7 of 7
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