Why does a ZERO balance on my CC lower my score?????

[WONDERMENT]

Equifax drops my FICO 20 points whenever I have paid off the balance on my card.  If I deliberately add as littel as $40 by the 28th of the month it goes back up.  Then I pay that off after the score changes.  What's this about????

[Anonymous]

From what I can tell - FICO likes to see you USE your credit - if it always reports as $0 - it doesn't know you are using it because it can't tell you paid it off before the due date.

Let ONE card report a balance (less than 10%) each month - and pay it before the due date so you don't pay interest but that FICO can see you using the card.   

[Anonymous]

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@WONDERMENT wrote:

Equifax drops my FICO 20 points whenever I have paid off the balance on my card.  If I deliberately add as littel as $40 by the 28th of the month it goes back up.  Then I pay that off after the score changes.  What's this about????

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Don't try to understand the reasoning, just learn the rules. Trying to "understand" FICO scoring will break your brain.The oft given "reason" as explained above is that the scoring algorithm can't discern usage without seeing a balance - despite the fact that more than just balance info gets reported....

Rule #1 is to leave a small balance on one card.

[crrredit]

The good news is that it's temporary--you can bounce back the next time the account reports. While many things on your report reflect your past history, and you may have to live with them for an extended time, the utilization % reflects a current condition that you can control from month to month.