FICO Score down 15 Pts when Card balance paid in full?

[Anonymous]

This is like Catch-22 situation for me.. Scores went down when I have $0 balance.

My FICO scores are  EX 750 / EQ 767/ TU805, planning to applying for Mortgage loan some time next week. I have 6 credit cards with just one card having about $1,900 balance. To gain maximum DTI for bigger loan amount I've reduced the debt and so paid $1,900 balance in full last week. That puts $0 balance / 0% utilization on all 6 cards with available limit of about $170K.

Today all 3Bureau scored went down about 15 points just because I have no debt. This is pretty strrange I felt..  Can't have good score and $0 balance both at a time? Anyone experienced this?

[Anonymous]

I'm assuming that no one told you that you shouldn't pay them all off. You should keep one card with a balance under 10%.

Also, your FICO 8 scores moving in one direction doesn't always mean that your mortgage scores moved in that same direction. When I paid some of my cards down, my FICO 8s took a hit, but my mortgage scores soared.

[Anonymous]

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@Anonymous wrote:
I'm assuming that no one told you that you shouldn't pay them all off. You should keep one card with a balance under 10%.

Also, your FICO 8 scores moving in one direction doesn't always mean that your mortgage scores moved in that same direction. When I paid some of my cards down, my FICO 8s took a hit, but my mortgage scores soared.

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Interesting.. .So FICO is designed such that consumers should carry some balance (and perhaps pay some interest) for better score.

Nice setup between FICO & Lending Insitutitions.. 

However good to know that Mortgage socre will not be affected..  One of my cards statement to be closed next week, will put some minor charges on it to get FICO Card Score also back on track.. 

Thanks

[Anonymous]

It only has to report the balance, which usually happens when your statement cuts. Pay off statement balance to avoid interest but make sure a small balance is reported on each statement

[empiror22]

Also, if your file is like mine: when I have a balance on my oldest card my scores are in low 800's, if I pay in full on that card I drop 15-20 points to 790 ish.
Other things to note that card is about 6 months older then rest, I usually have 2% balance showing ( always pay in full), less then 10% on one other card.

I also hate the catch 22.... But it's credit life at this point.

[StartingOver10]

OP, pull your mortgage scores here so you know before you officially apply for a new mortgage. Getting your mortgage scores here is a consumer pull and not a hard inq.

If your mortgage scores are similar to your FICO 8's than you will have no issues getting the best interest rate as any mortgage mid-score above 760 is top tier for mortgage rates (and PMI if applicable). 

[Anonymous]

Yes, pulled complete socres from myFICO today morning, I see following..

EX: 767, FICO Score 2

EQ: 793, FICO Score 5

TU: 805, FICO Score 4

Says those score versions for each bureau are used in Mortgage lending.

Looks like my median that lenders use could be EQ:793, should be good I think. Now I'm not really concerned Credit Card socres

[Anonymous]

Your scores are solid, no reason to worry.  With FICO you have to remember it is an algorithim that predicts how much risk you represent.  The only way to get credit for your ability to use credit is to have balances.  Its counterintuitive to good financial management.  We used no credit for several years and our scores were terrible as a result.  Took out a car loan and carried a few CC balances and the scores grew by over 100 points.  The advice they give in the fico score forum is to carry a 9% balance on your oldest CC to maximize your scores.

[Aduke1122]

Hey can you guys tell me how to pull my mortgage scores on here and how much it cost ? Thanks

[wmweeza]

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@Aduke1122 wrote:
Hey can you guys tell me how to pull my mortgage scores on here and how much it cost ? Thanks

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Order the 3 bureau report here, it includes your mortgage scores. It's around $30 http://www.myfico.com/products/ultimate-three-bureau-credit-report/