@Anonymous wrote:
I just received my credit card in April. I swipped it for 30% of my total balance and a few days later my score went up. I paid my first bill eight days early in full. I got an email this Friday stating the my balance decreased to $0 and Experian dropped my score by 7 points. Can someone explain this to me? Why was I penalized for paying the bill in full? Is it because this is a new account? Is it because I only have one credit card?
1. Often the "alert" and the noted change are unrelated.
2. The only way paying a revolving balance down to zero would cause a score decrease is if you have no other cards reporting a balance. So in this case, since you have only one credit card, you may have gotten the 7 point drop by reporting zero. The FICO 8 and FICO 9 algorithms penalize you for having no reported balances. Next time let your statement report a balance of $10, before you pay it off, and see what happens.
