Timing Quirk of FICO Scoring

[gamegrrl]

I typically funnel all my expenses through one credit card, in order to take advantage of the cash back AND to simplify my bill paying. However, I do shop a lot on Amazon, and their new-ish Visa for Prime members gives a whopping 5% cash back on Amazon purchases, so I use that card for Amazon buys.

When I buy something on Amazon with that card, I go to the Chase website and pay it off immediately. Often before it officially shows up there. Doing so is apparently having a negative impact on my credit scores. Example: I recently made a $27 Amazon purchase with my Prime Visa. I immediately paid $27 on the card at the Chase site, which gave me a credit balance of $27. When the purchase landed in my account, it took me back to a $0 balance. I am super busy, and getting older, and I am so used to using one single card for everything I'm afraid that I will forget to pay a random card bill, so I just do it at the time of the purchase to get it over with.

So I get an Equifax alert through MyFICO today. My score has dropped one point because "the balance on one of your accounts has increased by $27". The preceeding Equifax notice was that "the balance on one of your accounts has DECREASED by $27". But because the DECREASE (my pre-payment) preceeded the INCREASE (the purchase transaction landing in my account), I lost a point.

Granted, one point is not a big deal. It took me from 849 to 848 on Equifax. But it's the principle of the thing. Shouldn't it be also looking at the balance? My account balance increasing by $27 simply moved me from a credit balance to $0. That should mean something, right?

[Anonymous]

Utilization has no memory.  If all other factors on your report remain exactly the same and you take your utiilization whatever percentage you are at an add X, any score change will switch back as soon as X is paid off and the new (old) balance reports again.  Same thing if you subtract X from a balance and it reports, once you add X back on and it reports your score will go back exactly to what it was prior. 

If your score isn't the same both before/after in the illustration painted above, a different factor on your profile is the reason for the scoring inconsistency.

Also keep in mind that you don't receive a scoring alert because your score changed.  You receive a scoring alert because something on your credit report changed and you are provided with a score at that time.  The item that you received the alert for may or may not impact your score at all.  It's extremely common for people to assume that the new score they see (and the amount it changed) is because of the scoring alert received, since both are received at the same time.  This however is not the case many times.  I know this can be confusing, but just know that the alert you got may have nothing to do with your score change.