Guess the score drop! 1% to ZERO utilization

[Anonymous]

I accidentally paid all my revolving balance when i indended to keep a 1-9% balance at all times.  

Total credit: $30,000

Total amount of Credit Cards: 4

Prior balance: $273 on one card.  All others at ZERO

Todays balance: 0

Guess the score drop!

Drum roll...

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Fico version 8

Experian: -14

Transunion: -14

Equifax: -11

Ouch!  No biggie though, as with all small changes, it's only temporary.

[Thomas_Thumb]

Thanks for the data.

So a 10 to 15 point drop appears to be a good rule of thumb for 0% cards reporting. I suspect a similar drop  for 100% reporting - assuming overall UT is maintained low. These generalities likely don't hold for one (maybe two) card profiles.

[masscredit]

I lost 13 points when I did the same thing. 

[EW800]

That is very close to the number of points that I lost a few months ago when I allowed all accounts to report $0. Thankfully, I did get every point back when I let a few dollars report a few days later.

FICO certainly does not like zero debt.

[Anonymous]

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@EW800 wrote:
That is very close to the number of points that I lost a few months ago when I allowed all accounts to report $0. Thankfully, I did get every point back when I let a few dollars report a few days later.

FICO certainly does not like zero debt.

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Does anyone else find this a bit odd?  I could understand zero revolving debt for an extended period of time may be considered a bad thing.  But immediatly when my account hits zero; bam, score drop.  Same thing with auto loans.  Immediately once it's paid in full, score drop.  FICO scores are meant to help determine your creditworthiness.  Arguably, with all other things equal, having zero debt auto loan installment debt would mean i would be more credit worthy to take a/another car loan.  

[Thomas_Thumb]

The models do not have a memory regarding credit card charges (debt). As a result they score you based on the latest snapshot. Basically, if you have a boatload of credit but don't use any of it, there is more uncertainty in assessing risk if more credit were to be extended - so drop score.  

Negative impact of zero % utilization is so easy to resolve it's not worth any deep thought that might be required to rationalize the scoring mechanics. The key point is knowing the effect on score and avoiding it when applying for new credit.

[Anonymous]

This is a great message. I was going to start a new message this morning before coming across it. I have a similar situation that I want the insight of others since it closely parallels Sliper's situation. 

I have <1% utilization on 9-10 cards with a total balance of $288. Using Experian CT/CCT it tells me if I pay $95 on the $288 balance, my score will jump 20 points. 

I do believe what Experian CT is telling me, because its simulator has been spot on to date. I just find it very odd and a bit disconcerting that paying down such a small amount in such a small total amount can lead to 20 more points. But when earlier in the year I would pay down my utilization % by paying $1600-$2000/monthly on my balances I'd see a small point increase of between 3-10 points. It just seems a bit unfair, and unbalanced. We're darned if we have a lot of cc debt, darned if we have zero cc debt, and yet oddly enough this point gain is encouraging me to get close to zero, but not exactly at zero. 

I'll take the points. Perhaps all this as it relates to my profile has to do with that all things being equal, I have nothing knocking my score except for a lot of car loan inquiries that I got at the end of November 2014. I'll never allow a dealership to gun blast loan approvals again. I'll visit my credit union first and get a check first. 

Thoughts? 

[Anonymous]

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@Anonymous wrote:

This is a great message. I was going to start a new message this morning before coming across it. I have a similar situation that I want the insight of others since it closely parallels Sliper's situation. 

I have <1% utilization on 9-10 cards with a total balance of $288. Using Experian CT/CCT it tells me if I pay $95 on the $288 balance, my score will jump 20 points. 

I do believe what Experian CT is telling me, because its simulator has been spot on to date. I just find it very odd and a bit disconcerting that paying down such a small amount in such a small total amount can lead to 20 more points.

Thoughts? 

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You can search my posts in the general section for some simulator testing with screen shots.   There is some anecdotal data from here and another forum indicating that the simulator makes the assumption of a single card reporting the balance.  There is also some better than anecdotal data that EQ and to some extent EX like ultra low utilization on another forum.

i suspect if you follow the simulator and get the reported balance on a single card, you will see a point gain close to that of the simulator, I did.

[Anonymous]

I'm going to look for your posts. And I'm going to follow EX's simulator closely since it's been very spot on. 

[Anonymous]

Zero Debt is the Achilles heal to the FICO score model. FICO needs debt to calculate your worthiness. We've all learned this the hard way with scores dropping from being debt free.