Score Dropped Over 20 Points - For paying off my credit cards!!!??

[Anonymous]

I just paid off all of my credit cards to a zero balance... What happens?  My score dropped 20 points!!  **bleep**.   It didn't drop until the last of the credit card statements reported to the credit agency as a zero balance.  In other words, the score didn't change until the last of the 5 credit cards I have reported a zero balance.  I don't understand how this could happen.  NOTHING else has changed.  Nothing.    Equifax is the only one that dropped and that is the only credit agency that is right now reporting all of my accounts at a zero balance.  That is how I know why it dropped, but I do not understand.....  How can paing off all of my debt hurt me?  Will putting a small balance help me again?

[Anonymous]

Yes, reporting all cards with $0 balance will result in you being penalized- counter-intuitive, yes.  You'll receive the most optimized score with only 1 card reporting a balance of under 10%.

[Anonymous]

Thank you very much, that is what I will do.  Thank you again!

[Imhotrodcrazy]

It has happened to me more than once and I have lost 14 points each time.  It's frustrating doing something you think is right only to be penalized for it. 

[Anonymous]

My score dropped 7 points from 834 to 827 because of increases in 4 accounts in the TOTAL amount of $1,852.  None of the accounts are late or have EVER been reported late. All accounts are current and up to date. An increase in 4 accounts (in an amount of less than $2K) should not cause a 7 point drop in my credit score.