Understanding when scores decrease

[Anonymous]

Hello,

I just wanted to know if anyone/someone who is more familiar with understanding the logistics of FICO Scores.  I am paying all of my bills on time, monitoring my score closely and always seen to dip here and then.  The problem that I am facing is that when my credit card hits zero, then I use it (maybe for $25-40) dollars, I get a text and an email from ScoreWatch that shows that my score has just dropped 5 to 7 points just because one of my credit cards has a balance increase.  It's never higher than $40.00 - HELP ME UNDERSTAND HOW THIS WORKS.

Tish! 

[Anonymous]

Are you using a card for the first time in a few months? If a card is reported as inactive and then goes active, there is often times a small drop that is usually regained the next month.

Another factor that is a possibility is if you have a larger number of cards reporting a balance than usual (even if all balances are very small).

[Anonymous]

What is the limit on this card? If you charging $40 on a card with a $200 or $300 limit, you're using more than 10% of your available credit. Stay between 3-0 % for best results. How many cards do you have in total? Not all of your cards should show a zero balance.

And......don't get too concerned about not understanding the mechanics of FICO scoring. There is no human being alive that does.  

Message Edited by cobra19 on 07-28-2008 09:18 AM

[jackg]

Tish,

I don't know the answer to your question but the same thing happened to me today. My NFCU credit card had not been used for about 6 months and had a zero balance. Today I got an email from score watch that my EQ FICO score had changed. Sure enough when I checked it at score watch my score had gone down 3 points with a $1 charge to the account. I have no explanation.

[Anonymous]

---

jackg wrote:

Tish,

I don't know the answer to your question but the same thing happened to me today. My NFCU credit card had not been used for about 6 months and had a zero balance. Today I got an email from score watch that my EQ FICO score had changed. Sure enough when I checked it at score watch my score had gone down 3 points with a $1 charge to the account. I have no explanation.

---

---

debtisgood wrote:

Are you using a card for the first time in a few months? If a card is reported as inactive and then goes active, there is often times a small drop that is usually regained the next month.

Another factor that is a possibility is if you have a larger number of cards reporting a balance than usual (even if all balances are very small).

[Anonymous]

Hey your right.  The credit card does have a small credit limits $242.00, but it was actually the yearly fee that I just got, which was $35.00 - but the card had been zero for some time now.  I have 4 cards in total and 3 of them have zero balances.  Why shouldn't the cards have a zero balance?

[Anonymous]

Having a 0 balance report on all but one card is a great thing - but you do need to use the cards so they don't go inactive or have your CCC cancel them. You should maintain activity by putting a small charge on them every other month and then paying that amount in full before the date the statement is cut.