HUGE fico drop--How to fix?

[Jazzzy]

Hi TidalWave,

I always show a small balance on at least one card. That seems to be popular wisdom here in the forums. I then pay it off after the statement cuts.

In all honesty, it's not unusual for me to have a couple of cards show tiny balances. We try to zero the cards out (except for one), but we continue to use them, so we'll have $20 show here or there. We do see a point difference in whether we have 3 of 7 cards show a balance versus 2 of 7 showing a balance. My husband loses about 7 points with 3 cards showing, and I usually lose around 5.

[blacklotus]

Lynette:

I have four credit cards I paid off three this month and carry a balance on my Chase Freedom M/C.  How much of a difference does it make what utilization I have on this one card.  I am carrying a balance of probably 30% (about $900 on $3000 CL) to try to rack up rewards points and because I am paying 0% APR intro rate and would like to take advantage of it.  Carrying a balance is the only way I can think of to use my intro rate APR because I have no other CC balances to transfer or anything like that.  Would this help my Fico because I am figuring my overall util. dropped.

I know what everyone is going to say is pay it down to 9% util.  but I'm not trying to finance anything soon nor app for anymore cards so I don't really need a score boost ...

[Jazzzy]

Hi blacklotus,

If your overall utilization dropped, you will likely see something of a point bump. I believe that FICO will look at your overall utilization but also takes into account individual card utilization. If you are not apping for anything any time soon, take advantage of that 0%.

The biggest risk of having a card nearly maxed out is that your other cards could get nervous and close or lower your credit limits. You are nowhere near maxed, however, so there should be no worry.

[WorkingMyWayUp]

Thank you, everyone, for your insight.  I am hoping that the new card will start to report and that I'll at least bounce up to where I was.  It was just a bit of a downer to see that drop, I feel like I'm moving in the wrong direction.    I'll try to keep my chin up and carry on...

[Anonymous]

I had a similar situation...with the same result.  my FICO was 640 and i had a couple old (5 years +) small collections still on my credit report.  i paid them off so i could try and increase my score before buying a house.  the act of paying them off...decreased my score by 30 points.  i was told by my lender that he sees that alot.  because the old debts show up as recent again...even though they are now at a zero balance.  luckily for me, i found a house before they had to run another report so i got a bit lucky.  my score is back upto where it was before now...it took 14 months.  this fico scoring system has to be destroyed.