Balance: $3.00 > $0.00 ~ Experian -23 Points?

[Anonymous]

I just received a myFICO notice that my Equifax dropped 12 points and my Experian dropped 23 points. The reason in the Alert section? A credit card balance going from $3.00 to $0.00.

There really isn't a backstory to this. I have 3 credit cards presently. All 3 cards I pay off monthly in full; however, 2 cards I keep at $0.00 (at the time of reporting AND after I have used the card on purchases for that month) and my Discover card I generally have about $3.00 or so at the time of reporting. I also utilize the Discover card but I pay the balance down to $3.00 right before reporting.

So in essence, I have a 1% utilization each month after I have used each card for the month and have paid it off.

Thoughts?

The loss of those points makes no sense to me unless there is an underlying simplistic reason I'm overlooking.

Thanks! 

[Anonymous]

So your card that normally reports a balance reported 0? That would be the all cards at zero penalty. 

[Anonymous]

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@Anonymous wrote:

So your card that normally reports a balance reported 0? That would be the all cards at zero penalty. 

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Not quite. I always have my Discover card report around $3.00 or so to avoid that very thing. That is one reason I'm confused about the points drop. Just to help clear up any confusion:

• I have 3 credit cards (at present).
• I pay off all balances on each card every month.
• I rarely have a balance over $3.00 on each card at the time of reporting (statement date).  I keep detailed data for each card on Google Calendar in order to keep track of all report dates, etc.
• In the above scenario, 2 cards reported at $0.00 for this month (One of these cards went from $3.00 to $0.00) and my Discover card (which currently has a balance of $3.00) will report this Sunday the 27th.

Hope that helped explain the situation.

[Anonymous]

As @Saeren said, the scoring model values a small balance more than no balance. So going from $3.00 to $0.00 (if that's the total for all of your cards), would result is a decreased score.

But that's not the only thing to consider. MyFICO doesn't generate an alert every time your score changes. But you only see an updated score when it does generate an alert. So it's entirely possible any number of things could have happened in the mean time that increased or decreased you score (likely in a relatively small way). And then, when something happens that generates an alert (like a balance change), you see the total score change since the last alert. And you naturally think it's all because of the alert.

In your case, it's entirely possible the 12 point and even the 23 point decrease was caused by the new zero balance. But sometimes people see score changes that make no sense. And it's because of something they were unaware of (and often couldn't realistically have been expected to be aware of).

[Anonymous]

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@Anonymous wrote:

As @Saeren said, the scoring model values a small balance more than no balance. So going from $3.00 to $0.00 (if that's the total for all of your cards), would result is a decreased score.

But that's not the only thing to consider. MyFICO doesn't generate an alert every time your score changes. But you only see an updated score when it does generate an alert. So it's entirely possible any number of things could have happened in the mean time that increased or decreased you score (likely in a relatively small way). And then, when something happens that generates an alert (like a balance change), you see the total score change since then last alert. And you naturally think it's all because of the alert.

In your case, it's entirely possible the 12 point and even the 23 point decrease was caused by the new zero balance. But sometimes people see score changes that make no sense. And it's because of something they were unaware of (and often couldn't realistically have been expected to be aware of).

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You might have posted before I finished typing my response. I do have a balance of $3.00 presently between all 3 of my cards.

[SouthJamaica]

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@Anonymous wrote:

I just received a myFICO notice that my Equifax dropped 12 points and my Experian dropped 23 points. The reason in the Alert section? A credit card balance going from $3.00 to $0.00.

There really isn't a backstory to this. I have 3 credit cards presently. All 3 cards I pay off monthly in full; however, 2 cards I keep at $0.00 (at the time of reporting AND after I have used the card on purchases for that month) and my Discover card I generally have about $3.00 or so at the time of reporting. I also utilize the Discover card but I pay the balance down to $3.00 right before reporting.

So in essence, I have a 1% utilization each month after I have used each card for the month and have paid it off.

Thoughts?

The loss of those points makes no sense to me unless there is an underlying simplistic reason I'm overlooking.

Thanks! 

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MyFICO alerts don't provide "reasons" for a score change. There are certain events which trigger MyFICO alerts.
If there happens to be any difference between your present score at that particular bureau and the previous score reported to you from that bureau, the score change is tacked on to the alert. There is not

necessarily any connection at all between the score change and the alert substance.

[Anonymous]

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@SouthJamaica wrote:

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@Anonymous wrote:

I just received a myFICO notice that my Equifax dropped 12 points and my Experian dropped 23 points. The reason in the Alert section? A credit card balance going from $3.00 to $0.00.

There really isn't a backstory to this. I have 3 credit cards presently. All 3 cards I pay off monthly in full; however, 2 cards I keep at $0.00 (at the time of reporting AND after I have used the card on purchases for that month) and my Discover card I generally have about $3.00 or so at the time of reporting. I also utilize the Discover card but I pay the balance down to $3.00 right before reporting.

So in essence, I have a 1% utilization each month after I have used each card for the month and have paid it off.

Thoughts?

The loss of those points makes no sense to me unless there is an underlying simplistic reason I'm overlooking.

Thanks! 

---

MyFICO alerts don't provide "reasons" for a score change. There are certain events which trigger MyFICO alerts.
If there happens to be any difference between your present score at that particular bureau and the previous score reported to you from that bureau, the score change is tacked on to the alert. There is not

necessarily any connection at all between the score change and the alert substance.

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I don't understand this response. myFICO did give me a reason why the points were lost - and that was because a detection was made where a balance went from $3.00 to $0.00. Unless there is a completely different reason why they would add that reason (or a financial event that took place) next to the point loss display, I'm not sure.

Btw, I'm speaking from a perspective of being a myFICO credit monitoring subscriber, so I'm posting my responses based on what I am seeing from the myFICO app regarding this alert. I'm not trying to be argumentative or confrontational. 

[Anonymous]

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@Anonymous wrote:

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You might have posted before I finished typing my response. I do have a balance of $3.00 presently between all 3 of my cards.

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Yep, at least I'd started typing before you posted.

So the Discover Card that will close on January 27 has a balance of $3.00 from the statement period that closed on December 27? If that's the case, then it would seem to be something else (which was the other point I made, and what @SouthJamaica is saying).

Or do you mean that the Discover Card currently has a balance of $3.00, which will report after the statement closes on January 27? If that's the case, then the current balance as far as the CRAs know is whatever it was on December 27. If that was zero, then you have three zero balances.

[Anonymous]

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@Anonymous wrote:

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I don't understand this response. myFICO did give me a reason why the points were lost - and that was because a detection was made where a balance went from $3.00 to $0.00. Unless there is a completely different reason why they would add that reason (or a financial event that took place) next to the point loss display, I'm not sure.

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Take a look at the second paragraph of my first response above. I'm not sure if I explained it well, but @SouthJamaica and I are trying to explain the same thing.

And I don't think your question and follow-ups come off as argumentative or confrontational at all. Just someone trying to understand some confusing data.

[SouthJamaica]

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@Anonymous wrote:

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@SouthJamaica wrote:

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@Anonymous wrote:

I just received a myFICO notice that my Equifax dropped 12 points and my Experian dropped 23 points. The reason in the Alert section? A credit card balance going from $3.00 to $0.00.

There really isn't a backstory to this. I have 3 credit cards presently. All 3 cards I pay off monthly in full; however, 2 cards I keep at $0.00 (at the time of reporting AND after I have used the card on purchases for that month) and my Discover card I generally have about $3.00 or so at the time of reporting. I also utilize the Discover card but I pay the balance down to $3.00 right before reporting.

So in essence, I have a 1% utilization each month after I have used each card for the month and have paid it off.

Thoughts?

The loss of those points makes no sense to me unless there is an underlying simplistic reason I'm overlooking.

Thanks! 

---

MyFICO alerts don't provide "reasons" for a score change. There are certain events which trigger MyFICO alerts.
If there happens to be any difference between your present score at that particular bureau and the previous score reported to you from that bureau, the score change is tacked on to the alert. There is not

necessarily any connection at all between the score change and the alert substance.

---

I don't understand this response. myFICO did give me a reason why the points were lost - and that was because a detection was made where a balance went from $3.00 to $0.00. Unless there is a completely different reason why they would add that reason (or a financial event that took place) next to the point loss display, I'm not sure.

Btw, I'm speaking from a perspective of being a myFICO credit monitoring subscriber, so I'm posting my responses based on what I am seeing from the myFICO app regarding this alert. I'm not trying to be argumentative or confrontational. 

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It didn't give you a "reason why". It mentioned 2 things: 1. the score went down 2. the balance on an account dropped to zero. It never said "because" or "reason" or anything like that. They are 2 separate things, which may or may not have been causally connected.