PAYING OFF BALANCES

[Anonymous]

JUST SAW THAT MY FICO SCORE WENT DOWN 12PTS AFTER ONE OF THE BALANCES DECREASED BY $200.  SHOULDN'T PAYING OFF MY DEBTS INCREASE MY SCORE?

[Anonymous]

Hello NNK.  Welcome and glad you are with us.

How many cards do you have?  Your subject line describes this as a "payoff."  Did that mean that the credit report showed all cards at $0?  If so, there is typically a 10-20 point penalty for doing that.

PS.  Your initial post uses capital letters for all the words.  Using "all caps" is considered "shouting" and is discouraged here.

[HeavenOhio]

Yeah, if every card reports a balance of zero, a 15-point or so ding is pretty typical. For optimal scoring, FICO likes a small balance on one card with the rest reporting zero. You don't have to pay interest to pull this off. That balance can come from charges made during the current month.

There's no need for frustration, though. The ding is temporary until the next time a card reports a small balance. When one understands the reasons behind score fluctuations, it becomes easy to take them in stride.

[Shooting-For-800]

Should have at least one balance reporting each month.  

You can pay the others off pre-statement.

Alternate cards, rinse, repeat.

[NRB525]

OP what are your FICO scores?

Do you have any late payments in your file?

[Anonymous]

Maybe I'm reading too much into this, but the OP said that he paid down "one" of his balances and saw a score drop.  To me, this implies that he still has other balances present.  That being said, it would be next to impossible for a $200 paydown to result in a 12 point score drop. 

Hopefully the OP will pop back into this thread and offer up a bit more information here.

[Jeffhacker]

I have a bit of a different situation.  Have a Capital One Quicksilver 1 card. It was inactive for months.  I used it and charged $473, paid it off in full.  The next month, my score increased (Equifax) because “an inactive card has become active”.  The following month,  I charged another $475 and paid it off.  My score dropped 6 points. I have another card with an $1,800 balance paid down from $6,000, and several other cards with no balance.  Scores are EQ: 738 (down from 744), TransUnion 803, Experian 769).  Any idea why?

Jeff

[Anonymous]

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@JeffhackerThe next month, my score increased (Equifax) because “an inactive card has become active”. 

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Your score didn't necessarily increase for that reason.  Any time you receive an alert, you receive a new score based on your credit profile at that time.  Any number of changes may have happened between your last score and your new one aside from just the alert reason.

[Anonymous]

Hard to attribute score changes to anything unless you have real time daily update of score and report, the only place to get this (without breaking your bank) and the only credit service I pay for is Experian.

[NRB525]

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@Jeffhacker wrote:

I have a bit of a different situation.  Have a Capital One Quicksilver 1 card. It was inactive for months.  I used it and charged $473, paid it off in full.  The next month, my score increased (Equifax) because “an inactive card has become active”.  The following month,  I charged another $475 and paid it off.  My score dropped 6 points. I have another card with an $1,800 balance paid down from $6,000, and several other cards with no balance.  Scores are EQ: 738 (down from 744), TransUnion 803, Experian 769).  Any idea why?

Jeff

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Has EQ been consistently lower? Does EQ have more, or more recent, INQ?

What was the timing of the pay down from $6k to $1,800, relative to these score changes? What is the credit limit on that specific card?