Score dropped 17 points after paying off a credit card balance to 0.

[Anonymous]

My Citi card had a $10 balance, and I paid it off to 0. Today I get a notification of an update to my credit, and when I check, my Experian Fico 8 score dropped 17 points! That is the only change reported.

What is going on? I'm trying to get the best rate on a mortgage soon, and this is not cool.

[jasonbourne84]

Is that your only bank-issued (non retail) credit card? If so, that's the problem. You get a penalty if you aren't using ANY of your credit. Ideally, you'd carry a very small balance (less than 9% of your total available credit) on ONE card each month. But, (and again, ideally) you'd have a few more cards carrying a zero balance each month 

[blindambition]

You typically want 3 revolving cards and 1 installment for best credit mix. Practicing AZEO, or all credit cards accounts at zero except one.

If you only have 1 card. You just experienced all accounts reporting zero penalty. Since shopping for mortgage, don't open cards now. Your LO might tell you to open a couple though, before approval!

[Anonymous]

I have a bunch of cards,. 2 Citi, 2 Chase, 1 Captial One, 1 American Express, 1 BOA, and I think 2 Synchrony cards. I also have a PayPal Credit account, and an Amazon Store Card. My Amazon Chase card (not the store card) almost always has a balance. Right now that is $115. Everything else is 0. 

[Anonymous]

You might want to take a deeper look at your CR then, paying off a CC while still having balances on others should not cause a 17 point score drop. At least not in my experience.

[Anonymous]

I have a good amount of cards and a mix of credit too. I just checked and it looks like my Chase card last reported a 0 balance, so I guess all my credit cards are reported as 0. When the current balance of $115 shows up, will that boost me back up? 

[Girlzilla88]

You should see an increase once things go back just make sure it's a Bank card reporting

[blindambition]

There's also a caveat with Chase. Don't use a Chase card as the one that reports. Once paid to 0, Chase automatically reports. Even mid cycle. Which means you'd experience All Zero penalty again.

[Anonymous]

Maybe I'll pay it to $1 

[blindambition]

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@Anonymous wrote:

Maybe I'll pay it to $1 

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Some cards will still show 0% on less than like $5. Haven't tested on my Chase cards.