FICO score drop after payment?

[Anonymous]

After reviewing credit report, I found that some of the accoutn I had have higher balance reported (about 1500 more.) than current balance. Two account were completely paid off about 5 weeks ago, so I reported the correct amount.

Then my score dropped 3 point. Yeah, it is small. But I can't understand why would score go down after my total balance went down.

The only change to my credit report on that day was

:The balance on the account decreased.

I have made no late payment, or opened a new account recently.

[Anonymous]

One of those weird things you learn. Fico likes at least 1 account to show a small balance. Strange I know. Actually if you probably had a few more bucks showing for your balance your score can gain about 10 whole points for the sweet spot.

Message Edited by ilovepizza on 04-02-2008 06:19 PM

[Anonymous]

That is certainly strange....

so I should not pay off the whole thing but leave couples of bucks behind??

No wonder why my score clime up so slow......

Message Edited by JY on 04-02-2008 07:38 PM

[haulingthescoreup]

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@Anonymous wrote:

That is certainly strange....

so I should not pay off the whole thing but leave couples of bucks behind??

No wonder why my score clime up so slow......

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Not on each account, but on one anyway. FICO seems to regard having all account paid off as a sign that you're too frightened to use the credit you've been issued.

Shoot for letting one card report a balance (maybe 2 if you have 6 or more cards), and the balance that reports should be laughably small. Then be sure to go ahead and pay it off once the statement drops!