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Decreasing FICO score not going back up.

Your FICO® Scores can impact your loan interest rates, terms, approvals and more.
Regular Contributor

Decreasing FICO score not going back up.

Hey guys, 

 

My average FICO score usaully stays arround 730, and most of the time I leave $1 on the statement balance across all my cards. And FICO will show $1 balance, 0% utl. 

 

Sometimes I will miss the closing date, and forgot to pay it down to $1. When that happens I will have 1% utl. and usually $200-$500 balance on that ONE card, the rest will most likely be $1, 0% utl. It is rare I would forget to pay down all the cards. 

 

But, even just a $1->$200 increase in balance would lower my score like 10+ points. 

At this point I will of course pay off everything. 

However, when I get it back down to $1 for next statement, I don't see the score coming back up. 

 

It's like:

$1->$200, lower scores;

$200->$1, nothing changes. 

 

No new HP or new Acc for above situations. 

 

Thoughts? 


Canadian Credit Cards
Message 1 of 11
10 REPLIES 10
Valued Contributor

Re: Decreasing FICO score not going back up.

i think you should abandon your exotic strategy and just pay your credit cards in full soon after the statement cuts.

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Message 2 of 11
Valued Contributor

Re: Decreasing FICO score not going back up.


@UpperNwGuy wrote:

i think you should abandon your exotic strategy and just pay your credit cards in full soon after the statement cuts.


Agree.   And why are you leaving only $1 / 0% util?  That's a no-no because 'no revolving credit usage' yields a FICO penalty.   You need to let at least one balance equating to more than 0% report each month -- that's how you build up your scores - by showing activity -- just try to keep total util under 8.9% and you'll be fine.   

Personal Aphorism:
"Forget What You Feel, Remember What You Deserve"


Starting FICO 8s | 09/06/2017: EX 641 ✦ EQ 634 ✦ TU 647
Current FICO 8s | 06/01/2019: EX 745 ✦ EQ 727 ✦ TU 737
Current FICO 9s | 06/01/2019: EX 753 ✦ EQ 751 ✦ TU 732
Highest FICO-8 Ever | 10/2018: 780 [on dirty report]

2019 Goal Score | 780s


My AAOA: 2.6 years not incl. AU / 2.9 years incl. AU
My AoOA: 6.4 years not incl. AU / 8.4 Years incl. AU
Report Status: Clean

Tending my Garden til 2/2021


Without patience, we will learn less in life. We will see less. We will feel less. We will hear less. Ironically, rush and more usually mean less.
Message 3 of 11
Regular Contributor

Re: Decreasing FICO score not going back up.


@thornback wrote:

@UpperNwGuy wrote:

i think you should abandon your exotic strategy and just pay your credit cards in full soon after the statement cuts.


Agree.   And why are you leaving only $1 / 0% util?  That's a no-no because 'no revolving credit usage' yields a FICO penalty.   You need to let at least one balance equating to more than 0% report each month -- that's how you build up your scores - by showing activity -- just try to keep total util under 8.9% and you'll be fine.   


thanks guys


Canadian Credit Cards
Message 4 of 11
Super Contributor

Re: Decreasing FICO score not going back up.


@thornback wrote:


Agree.   And why are you leaving only $1 / 0% util?  That's a no-no because 'no revolving credit usage' yields a FICO penalty.   You need to let at least one balance equating to more than 0% report each month -- that's how you build up your scores - by showing activity -- just try to keep total util under 8.9% and you'll be fine.   


From a practical standpoint this doesn't make much sense, but in actuality if the OP is leaving a $1 balance and it reports to the bureaus it results in the FICO algorithm "seeing" 1% revolving credit use on that account, as any non-zero decimal (even .0001) rounds up to 1.  If the OP has a $1 balance reported, he would not receive a "no revolving credit use" penalty.

Message 5 of 11
Super Contributor

Re: Decreasing FICO score not going back up.


@jxh5760 wrote:

 

$1->$200, lower scores;

$200->$1, nothing changes. 

 

Thoughts? 


Not possible.  Quite simply, any CR change that results in X points lost if exactly reversed would result in X points gained [back].

 

I'm not sure why you're micromanaging your accounts to report $1?  Do you think there's some benefit to this and if so, what?

 

I have no idea what your credit limits are, but any non-zero reported balance below 8.9% on an individual card and even up to 28.9% on an individual card in many cases will result in no score drop.  More important is aggregate utilization, where if you're staying below 8.9% overall your FICO scores are maximized.

 

One sector where you're clearly falling short is "number of accounts with a balance" as it sounds like you tend to let all of your cards report a balance.  If you were naturally letting your cards report [non-micromanged $1] balances every month, I wouldn't say anything... but since you're seemingly making an effort for all or most of them to report $1, you should know that the more accounts that report a non-zero balance the greater the scoring penalty imposed may be.  So, basically if you're taking (say) 5 of 7 cards down to a $1 balance every month, you may as well take them all the way down to $0 reported so long as you have at least one non-zero reported balance and avoid any FICO penalty related to too many accounts with a balance.

Message 6 of 11
Valued Contributor

Re: Decreasing FICO score not going back up.

 

 


@BrutalBodyShots wrote:


From a practical standpoint this doesn't make much sense, but in actuality if the OP is leaving a $1 balance and it reports to the bureaus it results in the FICO algorithm "seeing" 1% revolving credit use on that account, as any non-zero decimal (even .0001) rounds up to 1.  If the OP has a $1 balance reported, he would not receive a "no revolving credit use" penalty.


I stand corrected.

Personal Aphorism:
"Forget What You Feel, Remember What You Deserve"


Starting FICO 8s | 09/06/2017: EX 641 ✦ EQ 634 ✦ TU 647
Current FICO 8s | 06/01/2019: EX 745 ✦ EQ 727 ✦ TU 737
Current FICO 9s | 06/01/2019: EX 753 ✦ EQ 751 ✦ TU 732
Highest FICO-8 Ever | 10/2018: 780 [on dirty report]

2019 Goal Score | 780s


My AAOA: 2.6 years not incl. AU / 2.9 years incl. AU
My AoOA: 6.4 years not incl. AU / 8.4 Years incl. AU
Report Status: Clean

Tending my Garden til 2/2021


Without patience, we will learn less in life. We will see less. We will feel less. We will hear less. Ironically, rush and more usually mean less.
Message 7 of 11
Regular Contributor

Re: Decreasing FICO score not going back up.


@BrutalBodyShots wrote:

@jxh5760 wrote:

 

$1->$200, lower scores;

$200->$1, nothing changes. 

 

Thoughts? 


Not possible.  Quite simply, any CR change that results in X points lost if exactly reversed would result in X points gained [back].

 

I'm not sure why you're micromanaging your accounts to report $1?  Do you think there's some benefit to this and if so, what?

 

I have no idea what your credit limits are, but any non-zero reported balance below 8.9% on an individual card and even up to 28.9% on an individual card in many cases will result in no score drop.  More important is aggregate utilization, where if you're staying below 8.9% overall your FICO scores are maximized.

 

One sector where you're clearly falling short is "number of accounts with a balance" as it sounds like you tend to let all of your cards report a balance.  If you were naturally letting your cards report [non-micromanged $1] balances every month, I wouldn't say anything... but since you're seemingly making an effort for all or most of them to report $1, you should know that the more accounts that report a non-zero balance the greater the scoring penalty imposed may be.  So, basically if you're taking (say) 5 of 7 cards down to a $1 balance every month, you may as well take them all the way down to $0 reported so long as you have at least one non-zero reported balance and avoid any FICO penalty related to too many accounts with a balance.


This is incredibly helpful!! Thank you so much! 

 

What about charge cards? Should I get those down to 0 before closing? Or since they have no utl it won't matter?


Canadian Credit Cards
Message 8 of 11
Super Contributor

Re: Decreasing FICO score not going back up.

thornback,

 

One thing that is often very misleading is CMS front end (fluff) software that attempts to simplify things for members.  If someone has a $2000 credit limit card for example and their reported balance is $9, they're at under .5% ($10) utilization.  Most front end software will "round down" and show an image/graph indicating "0%" utilization of that tradeline.  When the FICO algorithm looks at that tradeline however, it sees the non-zero balance and rounds it up to 1% utilization.  This issue can become more magnified when you're talking individuals with higher credit limits.  For example, someone with a $20k card could let a balance of $195 report on their card, but some CMS software may display that at 0% revolving usage as it's under 1%.  Or, depending on the CMS, maybe it would take a $99 balance here (under half a percent) to show that rounding down, where $100-$199 may be displayed as 1%.  It's really inconsistent to say the least.

Message 9 of 11
Regular Contributor

Re: Decreasing FICO score not going back up.


@BrutalBodyShots wrote:

thornback,

 

One thing that is often very misleading is CMS front end (fluff) software that attempts to simplify things for members.  If someone has a $2000 credit limit card for example and their reported balance is $9, they're at under .5% ($10) utilization.  Most front end software will "round down" and show an image/graph indicating "0%" utilization of that tradeline.  When the FICO algorithm looks at that tradeline however, it sees the non-zero balance and rounds it up to 1% utilization.  This issue can become more magnified when you're talking individuals with higher credit limits.  For example, someone with a $20k card could let a balance of $195 report on their card, but some CMS software may display that at 0% revolving usage as it's under 1%.  Or, depending on the CMS, maybe it would take a $99 balance here (under half a percent) to show that rounding down, where $100-$199 may be displayed as 1%.  It's really inconsistent to say the least.


So basiclly leave 1% ult on one card and pay all other down to $0 for each closing date. 

What about charge cards? 0 or leave them be? 

Thanks man you've been very helpful! 


Canadian Credit Cards
Message 10 of 11