Balance Decreases Lead to Score Decrease?

[Anonymous]

First post here so let me know (gently) if this should've gone into a different topic.

Having a hard time understanding how making payments that almost zeros out one relatively minor revolving credit account and brings another major CC account below 10% utilization but results in a 3-6 point score decrease. I've never seen this before. I wouldn't mind (as much) if it didn't affect the score, but to make significant payments and see your score take a hit is a bit discouraging.

Happened with TransUnion (-3 pts for a total balance decrease of $753—Score 775 down to 772) and Equifax (-6 pts for the same decrease of $753—Score 777 down to 771). Experian posted the decrease but no change in score (774). I am in the middle of a refi on home that is supposed to close today—but nothing has reported on that except the initial credit pull—so that's the only thing I can think that might be affecting behind the scenes, but the score decreases were specifically linked to the balance decreases.

Is there something obvious I'm missing? Has anybody else experienced this recently? Possibly related to COVID situation?

[dragontears]

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@Anonymous wrote:

First post here so let me know (gently) if this should've gone into a different topic.

Having a hard time understanding how making payments that almost zeros out one relatively minor revolving credit account and brings another major CC account below 10% utilization but results in a 3-6 point score decrease. I've never seen this before. I wouldn't mind (as much) if it didn't affect the score, but to make significant payments and see your score take a hit is a bit discouraging.

Happened with TransUnion (-3 pts for a total balance decrease of $753—Score 775 down to 772) and Equifax (-6 pts for the same decrease of $753—Score 777 down to 771). Experian posted the decrease but no change in score (774). I am in the middle of a refi on home that is supposed to close today—but nothing has reported on that except the initial credit pull—so that's the only thing I can think that might be affecting behind the scenes, but the score decreases were specifically linked to the balance decreases.

Is there something obvious I'm missing? Has anybody else experienced this recently? Possibly related to COVID situation?

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How long ago was the credit pull for the refi? If coded properly mortgage inquiries don't affect your score for 30 days so the decrease might be due to that.

[SouthJamaica]

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@Anonymous wrote:

First post here so let me know (gently) if this should've gone into a different topic.

Having a hard time understanding how making payments that almost zeros out one relatively minor revolving credit account and brings another major CC account below 10% utilization but results in a 3-6 point score decrease. I've never seen this before.

Neither has anyone else. The balance decrease did not cause the score decrease. Something else did.

I wouldn't mind (as much) if it didn't affect the score, but to make significant payments and see your score take a hit is a bit discouraging.

Happened with TransUnion (-3 pts for a total balance decrease of $753—Score 775 down to 772) and Equifax (-6 pts for the same decrease of $753—Score 777 down to 771). Experian posted the decrease but no change in score (774). I am in the middle of a refi on home that is supposed to close today—but nothing has reported on that except the initial credit pull—so that's the only thing I can think that might be affecting behind the scenes,

Why "behind the scenes"?

but the score decreases were specifically linked to the balance decreases.

No, they weren't.

Is there something obvious I'm missing? Has anybody else experienced this recently? Possibly related to COVID situation?

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[Anonymous]

All I'm able to go by is the alerts that I'm getting from monitoring on myFICO. They are specifically tied to the decrease. For instance: "The balance of one of your accounts has decreased by $588" [-6] (777 down to 771)—so, yes, they were specifically linked. And by "behind the scenes" I meant that whatever else may be causing it that might not be the "specifically linked" reasons they are indicating in the alerts—like a the delay in applying decrease to credit pull done over 30 days ago when we started refi. It's beginning to look like that is possibly the culprit though.

[Anonymous]

That may be the case. There was no decrease in score when the pull first reported on credit a little over 30 days ago so that makes sense. Since I posted this earlier I have received confirmation that the refi did in fact closed today so that may be the "behind the scenes" event causing this. It's just not indicated in the alert. I'll be thankful to take only -3 - -6 points if that's the case. But I am a little worried that if it's not the cause, that I might about to be hit with an even bigger one in the next few days.

[Trudy]

A few things that are not always clearly explained or understood when signing up with a subscription is:

-All changes do not generate an alert (it's stated somewhere on myFICO and SouthJamaica has provided the specific language regarding   this in many other similar posts)

-Alerts are not always timely so you can't tie the date an alert is received to the date the action/change occurred

-TU is the only CB that will provide a specific alert solely due to a score change (it will be accompanied by score factors/reason codes listing the top few things impacting your score but it doesn't tell you why it changed)

So the alert you received that a balance on an account has decreased does not mean it's the reason your score changed or even that it changed on the day you received the alert.  The fact that an alert was generated due to an alertable event (balance change), if by chance a score change happened for any reason anytime since the last time it changed or last time you pulled your report then you will subsequently be notified that your score changed also.  

[Anonymous]

Thanks. I think because I've maintained a relatively modest portfolio of credit devices that almost all of the alerts I receive coincide with the corresponding increase or decrease in my score so I've gotten used to that pattern. I think this may be one of those times since I have a mortgage refinance now in the works (closed today) that "complicated" my normal and broke up that connection between alert and score change.

[Trudy]

A refi usually pulls all 3 CB's so if you receive an alert from TU with a score change (always the latest alert for me), take a look at the factors.  Sometimes you can tell the true reason for the change based on the order of the factors or change in order from the past score change factors.  But the best way, yet a bit more challenging if you can't see a before and after report is by scouring through the details of the before/after reports.  Sometimes its something you didn't think of or expect and even overlook on the 1st review.  There's new enlightenments every day here 

Although we can learn a lot in this forum through testing, remember the formula is "secret" so they will not tell you what exactly caused the change.  Through understanding the many nuances and many obvious things we now know will hurt or help is how we learn what may have caused a change on one's individual profile.

Congrats on the re-fi.