OMG! down 14 points on Equifax

Anonymous · ‎06-01-2015

My wife and i share a credit Card that recently had a balance of 987. My first payment of 487 increased both of our scores about 5 pts. The following month i went ahead and paid off the remaining 500 balance and BAM her Equifax score dropped 14 pts while mine were unchanged. Unbelievable i'm a month out from closing on a house and her score dops. last month we paid off one of our vehicles and our scores went up a few points i really don't understand this?

i ran through the scoring simulations; i thought keeping a zero balance would be beneficial since every other time i paid on it the scores went up. What gives any advice?

StartingOver10 · ‎06-01-2015

Did that pay off all of her revolving balances to zero? If so, that is what caused the score drop. Adding back $25 for her would help then. We don't have enough info though - what are her cc limits and balances?

BTW are you talking about FICO 08 scores or did you pull the FICO mortgage scores? The mortgage scores are different from the 08 scores and only the mid-score is used

Anonymous · ‎06-01-2015

we pulled the fico 8 scores and yes it was the remaining balance we paid to zero.

Her CC limits on one card is 3.5K and the balance is zero and the mutual card we just paid off is now at zero and the CC limit is 16K.

Anonymous · ‎06-01-2015

i reading through some of the other articles and it does appear that keeping a small balance will help. i'll try this and hopefully her score will go back up.

cdtotten · ‎06-01-2015

You should always carry a balance on one card, preferably 1% of your CL (up to 9%).

Having no balance on any card doesn't show FICO that you can properly utilize your credit cards.

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Anonymous · ‎06-03-2015

thank you for the advice i had know idea i had to carry a small balance. My mortgage guy told me to pay off the CC to have a better debt to ratio income on my home loan so i did and with the Fico scores dropping it would have hurt my APR on the loan as well. Thanks again.

cashnocredit · ‎06-03-2015

@Anonymous wrote:
thank you for the advice i had know idea i had to carry a small balance. My mortgage guy told me to pay off the CC to have a better debt to ratio income on my home loan so i did and with the Fico scores dropping it would have hurt my APR on the loan as well. Thanks again.

You don't have to carry a balance. This refers to not paying a balance in full and carrying a portion to the next month. The important thing is that a small balance report. You can and should pay it within the grace period to avoid interest.

I have reestablished credit over the last couple years
so my moniker is, well, rather out of date.

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Anonymous · ‎06-03-2015

I wouldn't worry about a 14 point drop.

Revelate · ‎06-03-2015

@cashnocredit wrote:
@Anonymous wrote:
thank you for the advice i had know idea i had to carry a small balance. My mortgage guy told me to pay off the CC to have a better debt to ratio income on my home loan so i did and with the Fico scores dropping it would have hurt my APR on the loan as well. Thanks again.
You don't have to carry a balance. This refers to not paying a balance in full and carrying a portion to the next month. The important thing is that a small balance report. You can and should pay it within the grace period to avoid interest.

Least with my current lenders they aren't counting the minimum payment on a $0 tradeline against my (minimal anyway) DTI... this wasn't the best advice I've ever seen a LO give but least I can understand it. A truly funny bit was when my own LO tried to get me to use their credit optimization service, I darned near started giggling, seriously look at the report before suggesting that!

That said, a $20 swing in DTI vs. a 14 point drop, no comparison, suck up the yuppie food stamp