topic Re: score drop for payoff? in Understanding FICO® Scoring

score drop for payoff?

Anonymous — Wed, 15 Apr 2015 18:45:55 GMT

I paid down a credit card last month (it wasn't a high balance, just $50) and just got an alert that my score droped over thirty points because of the balance decrease??? I'm confused why it would drop at all, let alone so much!

Re: score drop for payoff?

Anonymous — Wed, 15 Apr 2015 18:48:42 GMT

The balance decrease was the trigger for the update, not the reason for the score drop.

Re: score drop for payoff?

tattooedhusker — Wed, 15 Apr 2015 19:00:53 GMT

Did you happen to drop to 0% overall utilization?

Re: score drop for payoff?

redbeard — Wed, 15 Apr 2015 19:05:51 GMT

Its likely something else occurred as well that didn't cause an alert.

Or....

You paid off all of your credit cards to a balance of $0.00, which will cause a score drop

Or....

This account reported as closed and it impacted your mix / AAoA at the same time.

Or....

The Fico gods have looked down upon you as a bigger risk because of what you ate for dinner last night.

I know when I paid off my student loan, which was reporting fine, nothing bad, just paid it off, I took a 20+ point drop. Didn't expect that, wouldn't have paid it off if I knew that was coming. In the end though, it was good, got it paid off.

Dan

Re: score drop for payoff?

Anonymous — Wed, 15 Apr 2015 19:10:16 GMT

Wow. Yeah, I did, both cards were paid off and I never got around to using them for anything else last month. I'd read somewhere that you do need to use the revolving credit, so I usually charge something small each month. I had no idea not using them for a single month would impact the score that much, though.

I had a redeemable report for that bureau, so I took a look--nothing new was on it. So it must be the zero util. Guess I should be expecting similar alerts for the other two, then.

Re: score drop for payoff?

Anonymous — Wed, 15 Apr 2015 19:23:22 GMT

@Anonymous wrote:
Wow. Yeah, I did, both cards were paid off and I never got around to using them for anything else last month. I'd read somewhere that you do need to use the revolving credit, so I usually charge something small each month. I had no idea not using them for a single month would impact the score that much, though.

I had a redeemable report for that bureau, so I took a look--nothing new was on it. So it must be the zero util. Guess I should be expecting similar alerts for the other two, then.

Well, the good news is that utility has no memory, so if you report a non-zero util this month, you should get those points back.

Re: score drop for payoff?

Anonymous — Wed, 15 Apr 2015 19:34:40 GMT

That is good to know, thank you. We're still trying to figure out all this credit score voodoo, clearly still have a lot to learn Thanks everyone for the quick responses.