Paying off credit card lowers score?

jfullert · ‎02-13-2019

I have a credit card from a credit union, that I make occasional purchases on and either pay off in the same month or within a couple of months. Whenever I make a purchase on the card, my credit score goes up. When I make a payment or payoff the balance my credit score goes down. This seems like it is operating opposite to what I'd expect. Why is this happening?

thornback · ‎02-13-2019

Hi jfullert, Welcome to the forums!

Is this your only revolving credit account? If so, allowing it to report a $0 balance will cause your FICO scores to drop as you are penalized for having 'no revolving credit usage'. At least one of your cards must report a balance -- but not too high of a balance -- to prevent this penalty. Once your card reports a balance again, you'll regain your lost points.

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Anonymous · ‎02-13-2019

Yes reporting a zero balance will lower score if it's your only card. I get my balance down to less than 8% on one card then PIF when statement cuts. My other two report zero. It seems to satisfy fico