Paid off my credit cards and my score dropped?

[DH1988]

Greetings! Last month I paid off a $900 balance and now I have 0% credit usage. That's the only thing that has changed from last month and my score dropped 17 points. Can someone help me understand why?

[Remedios]

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@DH1988 wrote:

Greetings! Last month I paid off a $900 balance and now I have 0% credit usage. That's the only thing that has changed from last month and my score dropped 17 points. Can someone help me understand why?

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Whenever all your cards report $0.00, there is a scoring penalty as it makes it appear as if you're not using credit.

As soon as your next card reports a balance, you will get your points back. 

[K-in-Boston]

Yes, she is exactly right. Your credit score is a snapshot of a moment in time. If, in that moment, you are not demonstrating responsible use of revolving credit then you are a riskier consumer than one who is reporting low balance(s). It's a balancing act, but even a small statement balance of say $5 will bring those points back (and possibly more depending on what your previous balances were compared to your available credit lines, whether 50% or more of your cards previously showed a balance, etc.).  It always bears repeating, you don't need to carry a balance from month to month, you just need at least one revolving account to generate a statement with a balance due at the next scheduled due date.

[Anonymous]

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@DH1988 wrote:

Greetings! Last month I paid off a $900 balance and now I have 0% credit usage. That's the only thing that has changed from last month and my score dropped 17 points. Can someone help me understand why?

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While the first reply to your question is correct, you didn't provide enough information to give a concrete answer.  If this is the OPs only CC and he paid off a $900 [reported] balance on a $30,000 limit card, I agree that the no revolving credit use penalty could cause a 17 point drop.  If this was a $1000 limit card though, he would have gone from 90% utilization to 0% utilization and the no revolving credit use would have been easily wiped away and then some by the (say) 75 point gain in going from maxed out aggregate/individual utilization down to zero. 

The best way to proceed OP would be if you listed out all of your credit cards with their current reported balances and limits, referencing as well which card just reported the change in going from $900 to $0.

[Remedios]

OP had a balance on one Capital One card,  it was   $3390.93. Now it's paid. 

OP also stated "0% credit usage" 

Granted, their usage on other cards could have increased, leading to a score drop, or any other thing really. 

If OP feels like the answer does not match the situation, I am sure they will correct us if/when they return. 

In the meanwhile, I am opting for Occam's razor approach based on what they typed. KBG interrogation may commence once they elaborate on other factors. 

[DH1988]

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@Anonymous wrote:

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@DH1988 wrote:

Greetings! Last month I paid off a $900 balance and now I have 0% credit usage. That's the only thing that has changed from last month and my score dropped 17 points. Can someone help me understand why?

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While the first reply to your question is correct, you didn't provide enough information to give a concrete answer.  If this is the OPs only CC and he paid off a $900 [reported] balance on a $30,000 limit card, I agree that the no revolving credit use penalty could cause a 17 point drop.  If this was a $1000 limit card though, he would have gone from 90% utilization to 0% utilization and the no revolving credit use would have been easily wiped away and then some by the (say) 75 point gain in going from maxed out aggregate/individual utilization down to zero. 

The best way to proceed OP would be if you listed out all of your credit cards with their current reported balances and limits, referencing as well which card just reported the change in going from $900 to $0.

Nordstrom Visa - $0/$15k

Capone QS - $0/$7K

Amex - $0/$6k <-- card reporting change from $900 / $0 

Chase Freedom - $0/$2.8K 

I made charges on Nordy and Amex but they didn't post in time to be included on the statement.

The only other thing I can think of is I'm starting grad school in July and will be taking out Fed loans. I don't see the new account alerts yet, but maybe this is affecting my score if it's not my revolvers? Idk... 

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[DH1988]

Thaaaank you for your responses! I will let some charges post and hope my points come back...It seems so silly to lose points for paying off/not using credit for just one month. 

[Remedios]

Glad it was all cards at $0.00 and not something else. At least it's a self correcting issue 

[Anonymous]

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@DH1988 wrote:

Thaaaank you for your responses! I will let some charges post and hope my points come back...It seems so silly to lose points for paying off/not using credit for just one month. 

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@DH1988 Was going to post that my money is on a zero balance posting causing the score drop as was pointed out by two posters. Your situation hits home ... same thing happened to me until I read the MyFico Forum and realized that a zero balance posting was a no no for maximum score results. My Fico Score drop was similar to yours and as soon as a small balance posted ... bang the scores were back and I paid the reported balance right after the statement cut so I did not owe anything for awhile.