topic Re: Pay Credit Card - Dropped 21 Points in Understanding FICO® Scoring

Pay Credit Card - Dropped 21 Points

Anonymous — Thu, 15 Dec 2016 14:34:16 GMT

I had a balance of about 1500.00 I been paying that down for a good five months, I wanted to pay it off just incase I need to use it for hoilday shopping, after a few weeks my credit dropped by 21 points because my "UTILIZATION PERCENTAGE 78% -->0%" But also my credit was pay off in full. Why would it dropped by so when paying it off?

Re: Pay Credit Card - Dropped 21 Points

TrialByFire — Thu, 15 Dec 2016 14:44:53 GMT

Is this your only card?

Re: Pay Credit Card - Dropped 21 Points

Anonymous — Thu, 15 Dec 2016 14:46:50 GMT

Ya just my own card. Open for 1yr 5 months..

Re: Pay Credit Card - Dropped 21 Points

TrialByFire — Thu, 15 Dec 2016 14:50:19 GMT

I'm a little rusty on FICO scoring but IIRC if that's your only card you need to let a small ~$5 balance report. Not sure if that's worth 21 points but I guess it depends on your particular file.

Are there any other changes that could've happened? Old baddie popping back up, recent late payment, etc?

Re: Pay Credit Card - Dropped 21 Points

Anonymous — Thu, 15 Dec 2016 14:56:56 GMT

@Anonymous wrote:
Ya just my own card. Open for 1yr 5 months..

It might have been the 78% utilization reporting that dropped it. That right there is unhealthy utilization that might have caused it to drop..

I had to learn this utilization the hard way too. I have $200 secured credit card with Citi. I was like Its only $200 I can close to max it and easy PIF at the end of the month anyways. Didn't know that it did not matter. The rule is below 30% not matter how low your limit is.

Re: Pay Credit Card - Dropped 21 Points

Anonymous — Thu, 15 Dec 2016 14:56:43 GMT

I have another Credit Card that has 150.00 balance on it.

Re: Pay Credit Card - Dropped 21 Points

Anonymous — Thu, 15 Dec 2016 15:05:08 GMT

But it was at 78%+ for a month and half. I just pay it in full now it went down to 0%.

Re: Pay Credit Card - Dropped 21 Points

Anonymous — Thu, 15 Dec 2016 15:09:56 GMT

@Anonymous wrote:
But it was at 78%+ for a month and half. I just pay it in full now it went down to 0%.

and the only reason its giving you is because your utilization is now 0%?

Re: Pay Credit Card - Dropped 21 Points

iheartwings — Thu, 15 Dec 2016 15:32:52 GMT

HI Kuroo...

Welcome! As others have pointed out, you have no balance reporting on your card, which is likely what hurt you. And, yes, it can totally hurt your score by 21 points. The thing about FICO scores is that it's number that indicates the risk you are, and people who use credit reasonably (more on that in a moment) are considered lower risk than, say no credit.

What's reasonable you ask? We think the threshold is total credit card utilization at less than 9%. Individual card utilization is less important most of the time, but for you, it's more important because you have one credit card.

I would let a small balance report on that card of yours, and you should see your score come back up 21 points, as utilization has no memory. PIF, rinse, repeat.

If it's any consolation, when I have no credit balance reporting, my scores will drop anywhere from 12-23 points, depending on the CB.

You might consider getting 2 more cards to optimize your scores, and you could consider getting a small Share Secure Loan (paying it down and letting it ride; the loan improves your credit mix) . While we don't know all the exact numbers to completely optimize your FICO, these seem to be two things you can do to improve your scores.

I'd also recommend checking out the Understanding FICO Scoring forum where folks discuss changes in scores and factors that might be affecting them. You can find more info about the Share Secure Loan technique and tons of posts discussing utilization.

(Edited to fix my terrible spelling)

Re: Pay Credit Card - Dropped 21 Points

Anonymous — Fri, 16 Dec 2016 00:52:34 GMT

OP, you mentioned having a $150 balance on another card. Two questions:

1 - What is the credit limit of that card?

2 - Is that your ONLY other card or do you have others?

If so, please state the balances / limits of any others as well and we will be able to better tell you what's going on.

Re: Pay Credit Card - Dropped 21 Points

Anonymous — Fri, 16 Dec 2016 01:01:30 GMT

400 on the second card, and my other one I pay off. credit limit of 1500 was at 850.