My fico score dropped 27 points I paid balance down????

[Anonymous]

---

@noobafterbk wrote:
ok this why this system is so flawed? so you pay down your balances and your score drops? my student loans just got consolidated into one account. no changes to balance no difference other than seperate accounts were merged and my score dropped 24 points!!!!!
yes my balances on my cc are now zero and balance on student is reducing but my score went down gotta love the perfect myfico scoring algorythm

---

I have been "FORUM HOPPING"  because I have experiance the same foolishness and I trying to find someone to explain it I must say I am a bit irritated. No one at MYFICO cs can give a straight answer, I got 2 alerts 1st "your cc balance decrease" 2nd "your score decreased" NOTHING else , how is doing a good thing a bad thing? from what I hear paying your CC to 0 balance will lower your score, which is why I didnt. I'M LOST AND I'M OF 60 BUCKS!

[Barneygirl]

I just had the same exact thing happen!!!  Paid down card balances and took a 20 point drop in my score!!!!  Utilization on all cards was under 10% prior, and all but one was paid to $0 at statement cut.  20 points!!!! 

[Blessed221]

I'm dragging that last $500 out till Dec 18th when it's due no more pre-payments for that account I'm to afraid to pay it off ahead of time might take another hit can't affo to go in the wrong direction..

[CrankyDave]

I've removed multiple derogs from my report in the past few months (confirmed in a recent 3-bureau report purchase), kept my credit cards paid in full for about two years, and paid off the balance of my car loan years early. The result? A 33 point drop since July. I've been at the new score for six weeks, so it ain't a temporary glitch. Try to tell me that that isn't effed up. To me, this sends the very clear message that debt is rewarded and having no debt is punished.

[Anonymous]

---

@CrankyDave wrote:

I've removed multiple derogs from my report in the past few months (confirmed in a recent 3-bureau report purchase), kept my credit cards paid in full for about two years, and paid off the balance of my car loan years early. The result? A 33 point drop since July. I've been at the new score for six weeks, so it ain't a temporary glitch. Try to tell me that that isn't effed up. To me, this sends the very clear message that debt is rewarded and having no debt is punished.

---

I totally agree, if you paid off your ONLY installment you will take a hit , if you pay your all CC down to 0 your will take a hit, this what I've learned which is so effing stupid! also in my case I am not paying my cards downn to 0 balance I am coming from under very high utilization so I would assume any decrease would be good. Even if my score stayed the same I would've been ok because I still have a long way to go but WHY THE DECREASE?

[dnice77]

I think FICO is a model of ones ability to manage credit. So in one way having a bunch of cards at zero balance may be a bad thing. A 27point drop is a extreeme they other poster had a 5pt drop i belive that could make sense. I had all my cards maxed out due to a refi. scores took a dump. When i paind them to around 9% util the score jumped, mayting them down further had some change but very little.

[Ragelog]

A 27 point drop shouldn't happen on a reduction my guess is something else is the actual issue. Any new inquiries or accounts that have affected AA oA a paid off installment loan will sometimes do this as well. Did you have anything being disputed? When something is being disputed I believe omits it from your score. So if you disputed an old collection then the finding came back it was valid that could be the reason. So many things go into creating a score that it's rarely just one thing.

[IMCUTE2]

First I would like to say THANK YOU TO MY FICO FORUM!!! I have a similar situation. October 1st I joined the Fico score alerts my score was 719 EQ 700 TU and 668EX. I recently applied for a few cards with approvals or too many inquiries as the only reason for denial. I was ok with that. I had high utilization with these scores like around 60-75% and that varied with the credit report that was pulled.  I decided to pay down debt and this should boost my score because of all the incredible knowledge I found on this site.  I was around $20k-$25k credit card debt again depends on the bureau. I paid around $12000 toward this debt with a loan as I do not have this kind of money lying around lol. The loan will not report as it is from my TSP.  As the creditors begin to report the lower balances my score is constantly dropping.  I receive an alert daily as I thought this would increase my score as I get my utilization under control.  Any advice is greatly appreciated. I opened a Walmart card and it reported $64 and my score increased. I received an alert from TU balance decreased from $19k to $14k and score dropped another 7 points.  I know paying off my debt is the right thing to do and I will continue its just frustrating to see this happen at this time when I was barely in the 700's. My current scores now are as of today (11-6-14) 704 EQ 671 TU and 647 EX again I understand with my recent app spree and new accounts my scores would drop but not because I'm paying down my debt.  Thanks for listening.

[lord_kinbote]

---

@IMCUTE2 wrote:

First I would like to say THANK YOU TO MY FICO FORUM!!! I have a similar situation. October 1st I joined the Fico score alerts my score was 719 EQ 700 TU and 668EX. I recently applied for a few cards with approvals or too many inquiries as the only reason for denial. I was ok with that. I had high utilization with these scores like around 60-75% and that varied with the credit report that was pulled.  I decided to pay down debt and this should boost my score because of all the incredible knowledge I found on this site.  I was around $20k-$25k credit card debt again depends on the bureau. I paid around $12000 toward this debt with a loan as I do not have this kind of money lying around lol. The loan will not report as it is from my TSP.  As the creditors begin to report the lower balances my score is constantly dropping.  I receive an alert daily as I thought this would increase my score as I get my utilization under control.  Any advice is greatly appreciated. I opened a Walmart card and it reported $64 and my score increased. I received an alert from TU balance decreased from $19k to $14k and score dropped another 7 points.  I know paying off my debt is the right thing to do and I will continue its just frustrating to see this happen at this time when I was barely in the 700's. My current scores now are as of today (11-6-14) 704 EQ 671 TU and 647 EX again I understand with my recent app spree and new accounts my scores would drop but not because I'm paying down my debt.  Thanks for listening.

---

In my opinion, I do not think that is what is happening.  With your high utilization, then yes you should see a positive reaction from FICO, not a negative one.  I think there are other factors at play - such as the impact on your AAoA and the recent inquiries - I just don't think myfico alerts report those changes accurately - it may say balance decrease and have -X points, but in actuality the nevative points are a combination of other factors - that are not clearing being reported by mfico.

[IMCUTE2]

Thanks for your insight. I will continue paying down my debt and continue my journey to be 750 or better with less than 10 percent utilization. I will be at the less than 10 by the summer of 2015.