Feeling Fed Up!

[Anonymous]

I'm starting to get fed up with trying to build my credit and need some encouragement and advice. I have about $6000 worth of credit between 5 cards. My credit utilization between the 5 cards was at 59%. I paid my cards off to bring my utilization down to 1%. For some reason, my credit score dropped 14 points after paying off all my credit card debt. I don't understand why.

When I paid my cards off I also paid 1 of 2 medical bills that were in collection. When I paid the collection off, my score went back up but only 7 points. The next day, it dropped 2 points. 

I'm so fraustrated with this credit game. I just paid over $3000 in debt and my score is lower today than it was before I paid anything.

I'm feeling defeated and want to just say forget trying to improve my credit. 

[AllZero]

@Anonymous  What credit monitoring service are you using? Is it FICO or VantageScore?

If you are lowering your utilization, then it's reasonable to believe you will increase your FICO scores if crossing scoring thresholds.

$1 you can obtain your 3 bureau FICO 8 scores and reports at Experian or CreditCheckTotal (part of Experian). Cancel in 7 day or less to avoid the re-occurring monthly charge. Wash, Rinse, and Repeat as needed.

[Anonymous]

I'm using myFico and the score I'm looking at is my fico score 8.

[Brian_Earl_Spilner]

There are so many variables that could explain what happened. You paid down to 1%, but it's reporting as 0, or a lender ate your statement balance, etc. When you pay off a chargeoff or collection, it has to report to 0. Until, and when, that happens, it will report as a negative. It will stop updating afterwards. Your temporary score gains could just be a coincidence from accounts crossing an age threshold. Paying a chargeoff or collection off will give you a small boost, but you don't get the big one until all the chargeoffs or all the collections, or everything is paid or removed.

Without doing a deep dive into your reports or history, it'll be difficult to pinpoint the reasons for changes. If that's something you want to do, there are plenty of people here that can help you.

[AllZero]

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@Anonymous wrote:

I'm using myFico and the score I'm looking at is my fico score 8.

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@Anonymous Has your pay down reported to the bureaus by the time you received your scores? What about the deragatories?

Without data, it would all be speculation. We would need to know the before and after if you wish to share.

I would recommend reading the below from ABCD2199
The Truth about Credit Card Utilization
My 11 Rules to Credit Rebuilding
FICO Score: What to pay down first?

From Birdman7
General Scoring Primer and Version 8 Master Thread rev.5.17.20

[Anonymous]

All of my cards are reporting at zero, except for one that has a $37 balance. That's the 1% that's reporting. 

I just don't understand how paying off debt can lower a score at all. There were no other changes other than my credit utilization going down to 1% and the collection being deleted entirely. Not just reported to zero. 

Should I carry a small balance each month?

[AllZero]

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@Anonymous wrote:

All of my cards are reporting at zero, except for one that has a $37 balance. That's the 1% that's reporting. 

I just don't understand how paying off debt can lower a score at all. There were no other changes other than my credit utilization going down to 1% and the collection being deleted entirely. Not just reported to zero. 

Should I carry a small balance each month?

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Report a balance, yes. Carry a balance, no. Reason, to not pay interest.

[yapsalot]

First, on the issue of emotions, don't let this get you down. You took bold decisive action by paying down your cards but now feel cheated by a screwy credit system. Give it some time to see the results of your efforts. You are doing the right thing, headed in the right direction and you will see results soon.

On a technical level, please confirm that your paid off accounts are truly reporting to the credit bureaus at zero. Sounds like you have access to contemporaneous credit reports. Check them and verify the current balances on the credit reports are reflecting the payoffs you made. If you don't have access to up to the minute credit reports, you can't know for sure that the all your cards have actually reported the new balances to the credit bureaus. On my own accounts, I have seen it sometimes take over a week for some cards to report new info to the bureaus. A few months ago one of my cards did not update my new balance to the bureaus for a full billing cycle. 

Going forward, some of the most sophisticated individuals in the country are on this forum and they will help you, but they need more information to do so.

If you are willing to share that info, post this: list each card (or loan or other item on your credit report) give the date opened, credit limit, current balance as shown on your credit bureau reports, not the balance with the lender. Note the dates and lengths of any late payments e. g. "Citi card 30 days late June 2019", include closed accounts in the list and note the date of closure. Give the FICO 8 score for each of the three bureaus, who you got those scores from and the date the score was rendered.

With that information, numerous members of this forum will be able to pinpoint the problem and you will then have the knowledge of what's wrong and how to fix it. I urge you to take advantage of of this forum and get the knowledge you need to achieve scores that reflect the effort you have put forward. 

[Anonymous]

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@Anonymous wrote:

I just don't understand how paying off debt can lower a score at all.

It can't, and it didn't. You did the right thing no matter what!

There's something else going on there, probably something to do with updates to the collections. There is simply no way you're going to see a score drop from decreasing debt to a small amount reporting.

This is going to correct itself soon, just wait. You look a lot better to lenders right now even with the -14pt drop.