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I paid off all my credit cards and my experian score dropped 14 points.Whats hurting my score says "There is no credit activity "I m so disappointed. My utility is %0.Maybe it was a mistake.What should I do to rise it up again?
Any advice appropriate.
Thanks.
If all your cards are reporting $0 you are experiencing the "All Zero" penalty. Let ONE card report a small balance and you will get the points back
I thought we need to pay off all the cards.What's the point of this?
@murat533 wrote:I thought we need to pay off all the cards.What's the point of this?
Current FICO scoring is a snap shot, with everything at $0 the algorithm can not determine how you are managing your revolving accounts vs having a small balance that shows you can manage your revolving credit.
I left $81 balance on my Target card but utility still showed $0 and my score dropped 7 points.I paid it off and made it 0 and my score dropped another 4 points.Should I carry a small balance on all cc or just one to get my points back?
There's a difference between carrying and reporting. Carrying means rolling a balance over month to month, thus incurring interest. Reporting means using your card as normal, but then paying down the balance to a small amount under 8.9% of the card's limit (but not zero balance) before the billing cycle ends. Once the billing cycle ends, whatever the statement balance was at the time is what is reported to the credit bureaus. After the cycle ends and the statement is generated, then you may pay off this small remaining balance to zero if you wish.
Also, letting a small balance report generally only works on bank cards, not store cards. Hence your issue with the Target card. If you have another card, say from Citibank, Chase, Capital One, Wells Fargo, Discover, Barclays, etc. use that one to report this small, less than 8.9% balance I mentioned.
For maximum points, be sure to only let ONE bankcard report a small balance, with all the other cards at zero balance. This known as AZEO (All Zero Except One). Note this doesn't mean you can only use one card at a time; it simply means you can use any and all cards as much as you'd like, but be sure to pay all of them off to zero BEFORE their respective billing cycles end, while leaving that small <8.9% balance on only one bankcard prior to its statement cut/billing cycle end.
Exactly what @OmarGB9 stated, be sure to report it to a BANKCARD that part is important but the other notes listed are helpfull too!
If I do that can I get my point back?Will my score go up?
@murat533 wrote:If I do that can I get my point back?Will my score go up?
In theory, yes. Just keep in mind there are lots of moving parts to a score. Inquiries, age, installment balances, etc all play a role. If nothing else changes and you report a small balance on one of your bankcards next month, you should get your points back.