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Paid off credit cards 40 point drop???

GtownChix
New Visitor

Paid off credit cards 40 point drop???

I have paid off all credit cards, 8 in total. I went to check my score today and it dropped almost 40 points. Never late, oldest line is 6 years old. Seems I should have left the balance on them? 

Message 1 of 41
40 REPLIES 40
FinStar
Moderator

Re: Paid off credit cards 40 point drop???

Hi @GtownChix and welcome to the forums.

 

What is the source of the point loss?  Are you checking a CMS or directly from a FICO source?

Message 2 of 41
GtownChix
New Visitor

Re: Paid off credit cards 40 point drop???

Experian and Capital One credit wise. Only changes were paying off credit cards.

Message 3 of 41
Slabenstein
Valued Contributor

Re: Paid off credit cards 40 point drop???

FICO algos impose an "all zero" penalty if none of your revolvers are reporting a balance, tho 40 pts is probably too high for that alone.  But, as @FinStar says, we'd first need to know your score source to help you find the reason for the drop since FICO and Vantage react differently to util and balance changes.


Message 4 of 41
Slabenstein
Valued Contributor

Re: Paid off credit cards 40 point drop???


@GtownChix wrote:

Experian and Capital One credit wise. Only changes were paying off credit cards.


Capital One is a Vantage 3.0 score.  Is your Experian score from Experian's website or another source?


Message 5 of 41
snu
New Contributor

Re: Paid off credit cards 40 point drop???

Just had a similar change. I monitor with Experian and my FICO8 dropped 25 points (825 to 800) after all my credit cards reported zero. There were no other changes on my account. I expect when one of my cards reports a balance in a few days my score will bounce back to 825.

Message 6 of 41
Jnbmom
Community Leader
Senior Contributor

Re: Paid off credit cards 40 point drop???

Again vantage scores are NOT FICO so trying to compare and figure out is really pointless. They are not used by most lenders ( yes well aware of synch no need for that discussion🙄) and their scoring scales are vastly different.

 

 

 

 

EXP 758 TU 783 EQ 729
Message 7 of 41
GtownChix
New Visitor

Re: Paid off credit cards 40 point drop???

From experian site.

Message 8 of 41
GtownChix
New Visitor

Re: Paid off credit cards 40 point drop???

I'm not asking you to figure it out, just trying to find out if it's happened to anyone else, and what to do to get it back.

Message 9 of 41
Slabenstein
Valued Contributor

Re: Paid off credit cards 40 point drop???


@GtownChix wrote:

I'm not asking you to figure it out, just trying to find out if it's happened to anyone else, and what to do to get it back.


To tell you what to do to recover the lost points, we would need to figure out the cause of the score loss.  But for the point loss you saw on Experian after all of your cards reported $0 balances, you should recover at least a portion of it when at least one bankcard reports a balance, because Experian provides FICO scores and FICO algos have an AZ penalty.  For the score loss you saw on Chase's site, Vantage does not have an AZ penalty so it would be due to something else in your profile.  As has been said above, Vantage is used by very few lenders, so its metrics haven't been studied much here.


Message 10 of 41
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