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Member
PaulE
Posts: 8
Registered: ‎12-23-2012
0

Zero Utilization dropped FICO score 28 points!

I usually let a small balance report on my USAA MC and pay my other two cards down to zero before they report to give myself a total util of around 1%.  This month, I decided to switch and let my USAA AmEx report the balance, so I paid my MC down to zero.  Since my MC statement cuts 6 days before my AmEx that means I will have six days with all of my card reporting zero util.  While I expected a small drop, I was surprised to see today that my score dropped 28 points, from 789 to 761.  I would assume that it will come right back up once my AmEx reports next week?  Interestingly, when I used MyFico's score simulator to simulate paying all of my cards down to zero, it showed that my score would remain at 789.

Moderator
Revelate
Posts: 9,472
Registered: ‎12-30-2011
0

Re: Zero Utilization dropped FICO score 28 points!


PaulE wrote:

I usually let a small balance report on my USAA MC and pay my other two cards down to zero before they report to give myself a total util of around 1%.  This month, I decided to switch and let my USAA AmEx report the balance, so I paid my MC down to zero.  Since my MC statement cuts 6 days before my AmEx that means I will have six days with all of my card reporting zero util.  While I expected a small drop, I was surprised to see today that my score dropped 28 points, from 789 to 761.  I would assume that it will come right back up once my AmEx reports next week?  Interestingly, when I used MyFico's score simulator to simulate paying all of my cards down to zero, it showed that my score would remain at 789.


Sounds like a bug in the simulator: we know your experience to be accurate but it's nice to see a concrete data point.  Was this recently on EQ vis a vis Scorewatch or similar or some other score?

Starting Score: EQ 561, TU 567, EX 599* (12/30/11, EX lender pull 12/29/11)
Current Score: EQ 04 673, EQ 8 707, TU 720, EX 702* (09/02/14, EX older)
Goal Score: 700 on EQ '04 (01/01/15)


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Member
PaulE
Posts: 8
Registered: ‎12-23-2012
0

Re: Zero Utilization dropped FICO score 28 points!


Revelate wrote:

PaulE wrote:

I usually let a small balance report on my USAA MC and pay my other two cards down to zero before they report to give myself a total util of around 1%.  This month, I decided to switch and let my USAA AmEx report the balance, so I paid my MC down to zero.  Since my MC statement cuts 6 days before my AmEx that means I will have six days with all of my card reporting zero util.  While I expected a small drop, I was surprised to see today that my score dropped 28 points, from 789 to 761.  I would assume that it will come right back up once my AmEx reports next week?  Interestingly, when I used MyFico's score simulator to simulate paying all of my cards down to zero, it showed that my score would remain at 789.


Sounds like a bug in the simulator: we know your experience to be accurate but it's nice to see a concrete data point.  Was this recently on EQ vis a vis Scorewatch or similar or some other score?


Yes, I received a Scorewatch email alert this morning that my EQ fico score had changed and that a balance change had been detected.  Before I paid that balance off to zero, I ran that scenario though both MyFico's and CK's score simulator and both showed a zero point change.  Based on what I had read here, I was expecting a few point drop, but definitely not 28 points.  For another data point, I applied for a CLI a couple of weeks ago and once that HP hit my report, my score dropped 13 points, from 802 to 789.  So, it appears that going from 1% to 0% util has more than twice the negative effect as applying for new credit does.

Valued Contributor
-NewGuy-
Posts: 2,927
Registered: ‎12-18-2013
0

Re: Zero Utilization dropped FICO score 28 points!


PaulE wrote:

Revelate wrote:

PaulE wrote:

I usually let a small balance report on my USAA MC and pay my other two cards down to zero before they report to give myself a total util of around 1%.  This month, I decided to switch and let my USAA AmEx report the balance, so I paid my MC down to zero.  Since my MC statement cuts 6 days before my AmEx that means I will have six days with all of my card reporting zero util.  While I expected a small drop, I was surprised to see today that my score dropped 28 points, from 789 to 761.  I would assume that it will come right back up once my AmEx reports next week?  Interestingly, when I used MyFico's score simulator to simulate paying all of my cards down to zero, it showed that my score would remain at 789.


Sounds like a bug in the simulator: we know your experience to be accurate but it's nice to see a concrete data point.  Was this recently on EQ vis a vis Scorewatch or similar or some other score?


Yes, I received a Scorewatch email alert this morning that my EQ fico score had changed and that a balance change had been detected.  Before I paid that balance off to zero, I ran that scenario though both MyFico's and CK's score simulator and both showed a zero point change.  Based on what I had read here, I was expecting a few point drop, but definitely not 28 points.  For another data point, I applied for a CLI a couple of weeks ago and once that HP hit my report, my score dropped 13 points, from 802 to 789.  So, it appears that going from 1% to 0% util has more than twice the negative effect as applying for new credit does.


That's interesting, I've never seen a FICO drop by 28 points for zero UTIL. It will be interesting to see what happens in six days when your card reports a balance again.

Moderator
Revelate
Posts: 9,472
Registered: ‎12-30-2011
0

Re: Zero Utilization dropped FICO score 28 points!


-NewGuy- wrote:

PaulE wrote:

Revelate wrote:

PaulE wrote:

I usually let a small balance report on my USAA MC and pay my other two cards down to zero before they report to give myself a total util of around 1%.  This month, I decided to switch and let my USAA AmEx report the balance, so I paid my MC down to zero.  Since my MC statement cuts 6 days before my AmEx that means I will have six days with all of my card reporting zero util.  While I expected a small drop, I was surprised to see today that my score dropped 28 points, from 789 to 761.  I would assume that it will come right back up once my AmEx reports next week?  Interestingly, when I used MyFico's score simulator to simulate paying all of my cards down to zero, it showed that my score would remain at 789.


Sounds like a bug in the simulator: we know your experience to be accurate but it's nice to see a concrete data point.  Was this recently on EQ vis a vis Scorewatch or similar or some other score?


Yes, I received a Scorewatch email alert this morning that my EQ fico score had changed and that a balance change had been detected.  Before I paid that balance off to zero, I ran that scenario though both MyFico's and CK's score simulator and both showed a zero point change.  Based on what I had read here, I was expecting a few point drop, but definitely not 28 points.  For another data point, I applied for a CLI a couple of weeks ago and once that HP hit my report, my score dropped 13 points, from 802 to 789.  So, it appears that going from 1% to 0% util has more than twice the negative effect as applying for new credit does.


That's interesting, I've never seen a FICO drop by 28 points for zero UTIL. It will be interesting to see what happens in six days when your card reports a balance again.


FICO 8 on a gold-plated report, not out of the realm of possibility: the higher one's score, the harder one gets slapped for anything remotely wrong with the report.  Thank you for the detailed feedback PaulE!

Starting Score: EQ 561, TU 567, EX 599* (12/30/11, EX lender pull 12/29/11)
Current Score: EQ 04 673, EQ 8 707, TU 720, EX 702* (09/02/14, EX older)
Goal Score: 700 on EQ '04 (01/01/15)


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Valued Member
creditlady
Posts: 46
Registered: ‎04-10-2009
0

Re: Zero Utilization dropped FICO score 28 points!

[ Edited ]

This just happened to my husband just the opposite direction. My husband paid all 4 of his cards(some were overlimit) to a zero balance and his score only increased 13 pts. One card closes today so he let a 1% balance report so we will see if his score increases further

Valued Contributor
-NewGuy-
Posts: 2,927
Registered: ‎12-18-2013
0

Re: Zero Utilization dropped FICO score 28 points!


creditlady wrote:

This just happened to my husband just the opposite direction. My husband paid all 4 of his cards(some were overlimit) to a zero balance and his score only increased 13 pts. One card closes today so he let a 1% balance report so we will see if his score increases further


Well, your husband should see a boost when the 1% card reports. How much exactly is unknown and depends on other factors on his credit report. But it will go up!

Member
PaulE
Posts: 8
Registered: ‎12-23-2012
0

Re: Zero Utilization dropped FICO score 28 points!


-NewGuy- wrote:

PaulE wrote:

Revelate wrote:

PaulE wrote:

I usually let a small balance report on my USAA MC and pay my other two cards down to zero before they report to give myself a total util of around 1%.  This month, I decided to switch and let my USAA AmEx report the balance, so I paid my MC down to zero.  Since my MC statement cuts 6 days before my AmEx that means I will have six days with all of my card reporting zero util.  While I expected a small drop, I was surprised to see today that my score dropped 28 points, from 789 to 761.  I would assume that it will come right back up once my AmEx reports next week?  Interestingly, when I used MyFico's score simulator to simulate paying all of my cards down to zero, it showed that my score would remain at 789.


Sounds like a bug in the simulator: we know your experience to be accurate but it's nice to see a concrete data point.  Was this recently on EQ vis a vis Scorewatch or similar or some other score?


Yes, I received a Scorewatch email alert this morning that my EQ fico score had changed and that a balance change had been detected.  Before I paid that balance off to zero, I ran that scenario though both MyFico's and CK's score simulator and both showed a zero point change.  Based on what I had read here, I was expecting a few point drop, but definitely not 28 points.  For another data point, I applied for a CLI a couple of weeks ago and once that HP hit my report, my score dropped 13 points, from 802 to 789.  So, it appears that going from 1% to 0% util has more than twice the negative effect as applying for new credit does.


That's interesting, I've never seen a FICO drop by 28 points for zero UTIL. It will be interesting to see what happens in six days when your card reports a balance again.


Sure enough, when the balance on my AmEx reported this morning (bringing me back over a 1% total util), I got a Scorewatch alert that my fico score had changed.  +28 points, right back to the 789 I had before I paid all the cards off.  So, at least with EQ 08, it looks like zero util causes a pretty serious ding to your score.

Frequent Contributor
bdhu2001
Posts: 482
Registered: ‎04-24-2014
0

Re: Zero Utilization dropped FICO score 28 points!


PaulE wrote:

I usually let a small balance report on my USAA MC and pay my other two cards down to zero before they report to give myself a total util of around 1%.  This month, I decided to switch and let my USAA AmEx report the balance, so I paid my MC down to zero.  Since my MC statement cuts 6 days before my AmEx that means I will have six days with all of my card reporting zero util.  While I expected a small drop, I was surprised to see today that my score dropped 28 points, from 789 to 761.  I would assume that it will come right back up once my AmEx reports next week?  Interestingly, when I used MyFico's score simulator to simulate paying all of my cards down to zero, it showed that my score would remain at 789.


Is the score simulator only for those with score watch? If not, can you provide the link?

Current Score: EX 839 EQ 794:TU 792 on 7/4/14; EQ from myfFico on 6-26-14
Starting Score: EX 751 EQ 720 TU 737 on 4/9/14
Goal Score: 800+
Established Contributor
EW800
Posts: 707
Registered: ‎06-01-2008
0

Re: Zero Utilization dropped FICO score 28 points!


PaulE wrote:

Sure enough, when the balance on my AmEx reported this morning (bringing me back over a 1% total util), I got a Scorewatch alert that my fico score had changed.  +28 points, right back to the 789 I had before I paid all the cards off.  So, at least with EQ 08, it looks like zero util causes a pretty serious ding to your score.


That is very helpful information for us.  Thank you!  I am going to be in that 1-2% range when a cuple of payments report, so it is good to see that it can be a heck of a spanking for going to $0 across the board.  It is also good to see even more confirmation that UTIL has no memory!  Thanks again!  

 

 

Oct 2012: All Scores in the 520 range, during a foreclosure, CC Settlement and high UTIL. Very ugly days...
Oct 2014: EXP08: 717; EQ08: 728; TU08: 731; EQ04: 691
GOAL: FICO 08 Models 725+; FICO 04 Model to 700+

In My Wallet -- Discover $11.7K; Cap1 $8.4K; Amex $9.9K; Barclay $7K; Citibank $4.9K; US Bank $4K; Dell $5K; Care Credit $6.5K
My UTIL: Less than 1%

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