topic Re: 16 point FICO Drop After Chase Reported 0 Balance? in Understanding FICO® Scoring

16 point FICO Drop After Chase Reported 0 Balance?

Credit_hawk — Mon, 21 Dec 2015 23:08:48 GMT

Hey Guys,

I'm just trying to make sense of what happened today. I logged on CCT a minute ago and was shocked to see my FICO score drop from 752-736. The only thing that changed today from yesterday was Chase reported a new mid cycle $0 balance after paying off a $20 bill. So I went from <1% utilization ratio to 0% utilization ratio. I have $18,000 in credit with $0 balance/0 utilization. Could this really be responsible for such a large drop? Nothing else has changed.

EDIT: I just ran my 3 bureau and since Experian is always the first to update it appears that is exactly what happened. Since as of right now Equifax and Transunion are showing FICO increases rather than drops and they still have the $20 balance showing on theirs since they lag behind Experian. That's unbelievable! A 16 point drop because I have no balances on any of my cards?

Re: 16 point FICO Drop After Chase Reported 0 Balance?

Gunnar419 — Mon, 21 Dec 2015 23:40:21 GMT

@Credit_hawk wrote:
Hey Guys,

I'm just trying to make sense of what happened today. I logged on CCT a minute ago and was shocked to see my FICO score drop from 752-736. The only thing that changed today from yesterday was Chase reported a new mid cycle $0 balance after paying off a $20 bill. So I went from <1% utilization ratio to 0% utilization ratio. I have $18,000 in credit with $0 balance/0 utilization. Could this really be responsible for such a large drop? Nothing else has changed.

EDIT: I just ran my 3 bureau and since Experian is always the first to update it appears that is exactly what happened. Since as of right now Equifax and Transunion are showing FICO increases rather than drops and they still have the $20 balance showing on theirs since they lag behind Experian. That's unbelievable! A 16 point drop because I have no balances on any of my cards?

As you so sadly discovered, yes. Never let all ccs report $0 at the same time. The good news is that your score should jump back up when one card reports a small balance.

It's one of those seemingly irrational aspects to FICO. They like to see usage and the algorithms aren't set up to get that a brief payoff of accounts doesn't equate to no usage.

Re: 16 point FICO Drop After Chase Reported 0 Balance?

Anonymous — Mon, 21 Dec 2015 23:45:16 GMT

Yes I would expect to see a slight drop if all CL's report a 0 balance. The good thing is utilization has no memory so as soon as you get an account to report a small balance you see get those points right back.

Re: 16 point FICO Drop After Chase Reported 0 Balance?

EdMan63 — Mon, 21 Dec 2015 23:53:55 GMT

Same thing happened to me a couple months ago. I payed off everything. First time I ever had all zeros. My score dropped about 14 pts. When I let $50 report on my Freedom I got 10 pts back but It took a couple of months for it to fully recover. I use CCT as well.

Re: 16 point FICO Drop After Chase Reported 0 Balance?

Gmood1 — Tue, 22 Dec 2015 00:04:15 GMT

The same will happen and possibly a greater drop paying off a installment loan(Auto loan). This is why I manage my payments, but I do not micromanage what reports.

Unless you're buying a home soon. I see no reason to stress over reporting zero balances across the board.

Re: 16 point FICO Drop After Chase Reported 0 Balance?

CreditMagic7 — Tue, 22 Dec 2015 00:05:21 GMT

Completely expected result.

Such is exactly another reason why that i try to steer folks (where i can) to drop in on this sub-forum sometime so as to help them get up to speed so you don't get caught with your proverbial shorts down LoL

http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/bd-p/ficoscoring

Re: 16 point FICO Drop After Chase Reported 0 Balance?

Anonymous — Tue, 22 Dec 2015 00:56:57 GMT

A followup question, if you spend say $10 on a credit card, but it's less than 0.5% of that card's credit limit, does that count as 0% or 1% utilization?

Re: 16 point FICO Drop After Chase Reported 0 Balance?

Credit_hawk — Tue, 22 Dec 2015 03:10:36 GMT

Credit magic, you are very right! Lesson learned. While those chase follow up reports when you pay off your balance are helpful this is a slight downside to it.

Thanks for all your help and I can only hope I saved someone who read this from doing the same stupid thing I did! The good thing is my other chase account reports tonight with a $25 balance. Curious to see if that will fix it or if it has to be $20 on that same card from today.

Re: 16 point FICO Drop After Chase Reported 0 Balance?

CreditMagic7 — Tue, 22 Dec 2015 03:26:06 GMT

@Credit_hawk wrote:
Credit magic, you are very right! Lesson learned. While those chase follow up reports when you pay off your balance are helpful this is a slight downside to it.

Thanks for all your help and I can only hope I saved someone who read this from doing the same stupid thing I did! The good thing is my other chase account reports tonight with a $25 balance. Curious to see if that will fix it or if it has to be $20 on that same card from today.

Yeah with all the constant encouragements to keep credit card balances PIF (which is an excellent practice of course) it sometimes gets overlooked that at least (1) card should always continue without fail to show just enough of a balance to tip the scales for maximum FICO points.

Re: 16 point FICO Drop After Chase Reported 0 Balance?

uswala — Tue, 22 Dec 2015 03:49:17 GMT

My TU scores dropped by 18 points recently due to this very reason.

Re: 16 point FICO Drop After Chase Reported 0 Balance?

Anonymous — Tue, 22 Dec 2015 10:57:41 GMT

Sad ... you pay your bills on time, the reward is that you are left with no balance and a drop in your score. Fly's in my face for logic but it is! Happened to me.

Re: 16 point FICO Drop After Chase Reported 0 Balance?

lg8302ch — Tue, 22 Dec 2015 11:22:53 GMT

Yes... this is the result of paying before statement cut on other cards .. if you want to get best Fico scoring you will need to report a balance on any other card and not only on Chase so will not end up with 0 balance on all accounts. Right now this mid cycle reporting happens for Chase only and for US Bank they report at the end of the month and not when statement is closing. Now on the bright side ... Fico has no memory and your score will be right up next month ..so don't worry !

Re: 16 point FICO Drop After Chase Reported 0 Balance?

lg8302ch — Tue, 22 Dec 2015 11:26:51 GMT

@Anonymous wrote:
A followup question, if you spend say $10 on a credit card, but it's less than 0.5% of that card's credit limit, does that count as 0% or 1% utilization?

even 1$ is going to be 1% ..only negative balances and 0 balances report 0 % util

Re: 16 point FICO Drop After Chase Reported 0 Balance?

DU556 — Wed, 23 Dec 2015 07:43:28 GMT

I've had points dropped after a dormant card reported balance once again. It is not always the case that a card showing a balance once again will give you an increase in points. Hopefully you get your points back.