12 points drop for paying 2 days IN ADVANCE?

[Anonymous]

I am really confused. A week ago I was supposed to go abroad and I was not sure I could connect to the Internet.

Therefore, I paid the full balance of my Amex, 2 days in advance (the 13th rather than after the 15th). Yesterday, I received an alert saying that TransUnion reduced my score of 12 points because of "Balance change".

Message: "The total balance on all your Bankcard account(s) has changed. This amount is a sum of all Bankcard balances."

Type "All bankcard" 

Total Balance: $0.00

I don't get it. I must wait for Amex to close the statement? If I pay in advance, is it so bad?

Thanks in advance,

R

[Anonymous]

I think I may have found the aswer by myself:

http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Balance-on-credit-card-went-to-0-so-my-cr...

However, I always had $0.00 balance for the last 8 years thus the only difference is that I paid before Amex closed the billing month.

Weird.

[-NewGuy-]

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@Anonymous wrote:

I think I may have found the aswer by myself:

http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Balance-on-credit-card-went-to-0-so-my-credit-score-dropped-9/td-p/3553295

However, I always had $0.00 balance for the last 8 years thus the only difference is that I paid before Amex closed the billing month.

Weird.

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Sounds like you indeed found the answer. If you did get a 'Balance Change' alert, then it sounds like AMEX did indeed report a balance on the last billing cycle. So, now that there isn't a balance across your cards, the score dropped. The good news is that FICO has no memory when it comes to UTIL, so you can just let a small balance report next month and you'll be back up.

[taxi818]

Its amazing people blame things instead of looking at bigger cause.

The fact you paid early did not cause the drop. hopefully you have at least 5 dollars on 1 card.

With 0 balance across board. you may as not have any credit cards.

im not saying pay interest or anything.

im saying let a couple dollars report. and then pay in full the day after it reports if you like. as fico will count those couple dollars or round up to 1 percent usage. hence the absolute best scores possible. so no. its not the fact you paid early. its the fact you have 0 balance. as others have hinted at. 1-9 percent at least on 1 card. if apping for something. otherwise. below 30 percent is also ok if you are not appying for somthing. good luck.

[jsucool76]

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@taxi818 wrote:

Its amazing people blame things instead of looking at bigger cause.

The fact you paid early did not cause the drop. hopefully you have at least 5 dollars on 1 card.

With 0 balance across board. you may as not have any credit cards.

im not saying pay interest or anything.

im saying let a couple dollars report. and then pay in full the day after it reports if you like. as fico will count those couple dollars or round up to 1 percent usage. hence the absolute best scores possible. so no. its not the fact you paid early. its the fact you have 0 balance. as others have hinted at. 1-9 percent at least on 1 card. if apping for something. otherwise. below 30 percent is also ok if you are not appying for somthing. good luck.

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I will agree with the part in red. 

The paying early did not cause the drop, the having no balances did. 

I, personally, am not a proponent of the "between 1-9%" util game unless you are planning to apply for something. It turns you into a micromanager and makes credit a chore, as opposed to a tool. 

[Anonymous]

I blame things because I am not familiar with how this credit score works. 

i have only one credit card and I have always paid in full, every month, since more than 8 years. Never left one single cent on my balance. My credit was above 810 across the three bureaus until I paid the full balance 2 days before it was due. At that point, TU dropped 12 points, Ex dropped 15 points.  I assume also the third will also drop shortly.

This is the reason why I thought this was the cause. Because it was the only single thing I did differently in the last years.

now I think I undestand. Amex reports my balance around the 15 / 20 of each month. I will pay down by balance to have 1-9% of my credit, wait for them to report it, and then pay the remaining as usual.

am I correct?

[taxi818]

Yes. But to really solve it. Get another card that you can leave small amount in. I'm pretty sure I said the 1-9 percent is when applying for something. So you are correct. Like I said. Leave even 2-3 dollars. So what is interest on that? 20 cents. ThAt way you don't worry. But if score dives from that. So be it.

[Anonymous]

I am no expert to this scoring thing but I did an experiment with my score and this how it work ONLY with my tradeline. Everyone have different tradeline so it may or may not work with other.

At first I was confused like you and concern of how much balance I should carry over for the statement cut off.  I always thought  paying off the credit card to 0 balance is best way to do.  But that doesnt help to increase my score at all.   My Credit line is 1000 on my Cap1, next following month I carry over 20% and my score drop 12 pt.  The following month I carry over 15% my score remain the same.  Then I carry over 5% like the expert suggest 1-9% and my score increase 14pt.   From that time I always carry my balance 1-9% every month.  Believed it or 3 months ago i started with a score 554 Experian Fico score. Last week i borrow personal loan and my  Fico score is 715.

My tradline

3 capital one card 2 paid off with 0 balance and 1 always leave 1-9% balace

1 car loan

1 installment loan

1 personal loan

1 collection from midland but was settled.

Hope this help you giving some ideas.

[Anonymous]

Thanks to all.

This is what I am doing:

1. I will make payments in advance to keep my balance in the 1-9% range when getting close to the billing cycle.

2. I ensure that I charge something to the credit card after the billing cycle but before paying the amount due.

3. I will pay in total the amount due of the billing cycle.

in this way I sould always have a balance between 1-9% but at the same time pay completely the amount due for the last billing cycle (thus no interests).

Let's see if it works.

[taxi818]

I think you got it. Good luck.