Why did TransUnion lower score for paying off debt balance?

[PastaThing]

Hello,
I am rebuilding my credit and try to stay at 0% utilization. I once let one credit card go unpaid until the payment was due, and paid it on time. That increased my balance (money utilized) to $60 on my credit report, which Transunion reacted to by RAISING my credit score by 11 points. The next month my balance was reported at 0 again, as usual, and Transunion dropped my score by 11 points as a result.  Why on earth would they reward me for owing money? And why would they penalize me for paying that "down"? Especially when the card remains open and the other bureaus don't seem to be doing that.
Just to clarify, it was not a late payment. It was simply "credit utilization" for one cycle.
Thank you!

[RSX]

ALL Zero Penalty - when all accounts are at zero, you will be penalized

look up AZEO on this site  - All Zero Except One - this will get you the most amount of points

you need one card to report a $10 amount, and the points will come back 

[Kree]

Because part of your score is your credit mixture.

If you are currently using zero credit, you have no mixture.

[PastaThing]

Wow, I had NO idea! Thank you so much.
Is there an ideal credit utilization rate? Or is it OK as long as it's more than 0 and less than 10?
I'm trying to wrap my head around it.
Thanks for the help.

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@RSX wrote:

ALL Zero Penalty - when all accounts are at zero, you will be penalized

look up AZEO on this site  - All Zero Except One - this will get you the most amount of points

you need one card to report a $10 amount, and the points will come back 

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[PastaThing]

Thank you so much! I had absolutely no idea. Do you know how much utilization carried over is ideal?
Thank you for the help.

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@Kree wrote:

Because part of your score is your credit mixture.

If you are currently using zero credit, you have no mixture.

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[chiefone4u]

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@PastaThing wrote:

Wow, I had NO idea! Thank you so much.
Is there an ideal credit utilization rate? Or is it OK as long as it's more than 0 and less than 10?
I'm trying to wrap my head around it.
Thanks for the help.

---

@RSX wrote:

ALL Zero Penalty - when all accounts are at zero, you will be penalized

look up AZEO on this site  - All Zero Except One - this will get you the most amount of points

you need one card to report a $10 amount, and the points will come back 

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Typically you want to stay under 28.9% utilization of a single card, while also remaining under 8.9% aggregate utilization. 

For a card to count as having a balance it usually needs to have enough of a balance report to round to 1% utilization... usually $5-$10 will do that as long as the card doesn't have $20,000+ limit.

Most people on here suggest $10 because some creditors will actually forgive a balance that would cost more to print and mail the bill than the actual amount due. It has been reported by a few that some banks will wave a $5 balance. 

[PastaThing]

Thank you so much! That is very helpful.
I know this sounds silly, but how do I know when my statement "cuts". I thought if you pay after the due date your payment is reported as late. I just realized I don't even KNOW how to carry over a balance... Do I make my payment as usual but just leave a $10 balance and then owe interest on that on my next statement? And just always leave that much to carry over?
Sorry, I am new to all this!

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@chiefone4u wrote:

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@PastaThing wrote:

Wow, I had NO idea! Thank you so much.
Is there an ideal credit utilization rate? Or is it OK as long as it's more than 0 and less than 10?
I'm trying to wrap my head around it.
Thanks for the help.

---

@RSX wrote:

ALL Zero Penalty - when all accounts are at zero, you will be penalized

look up AZEO on this site  - All Zero Except One - this will get you the most amount of points

you need one card to report a $10 amount, and the points will come back 

---

---

Typically you want to stay under 28.9% utilization of a single card, while also remaining under 8.9% aggregate utilization. 

For a card to count as having a balance it usually needs to have enough of a balance report to round to 1% utilization... usually $5-$10 will do that as long as the card doesn't have $20,000+ limit.

Most people on here suggest $10 because some creditors will actually forgive a balance that would cost more to print and mail the bill than the actual amount due. It has been reported by a few that some banks will wave a $5 balance. 

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[RSX]

You have to pay the minimum payment for sure.   You will not receive a Late notice for carrying any CC balance over to the next month, as long as you have fulfilled the min payment 

you really won't pay any interest since as soon as your statement posts, you can then pay the last $10 and not get charged interest

to find your statement date you can login and look for the CC statements/notices

it will typically be close to the same date every month.   The only change will be when it falls on a weekend or holiday

USBank is always the last day of the month. (As an example)

[PastaThing]

Thank you so much!

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@RSX wrote:

You have to pay the minimum payment for sure.   You will not receive a Late notice for carrying any CC balance over to the next month, as long as you have fulfilled the min payment 

you really won't pay any interest since as soon as your statement posts, you can then pay the last $10 and not get charged interest

to find your statement date you can login and look for the CC statements/notices

it will typically be close to the same date every month.   The only change will be when it falls on a weekend or holiday

USBank is always the last day of the month. (As an example)

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[chiefone4u]

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@PastaThing wrote:

Thank you so much! That is very helpful.
I know this sounds silly, but how do I know when my statement "cuts". I thought if you pay after the due date your payment is reported as late. I just realized I don't even KNOW how to carry over a balance... Do I make my payment as usual but just leave a $10 balance and then owe interest on that on my next statement? And just always leave that much to carry over?
Sorry, I am new to all this!

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 Whenever you can help it, DO NOT pay interest! And ALWAYS pay at least the minimum payment by the due date. (Caps aren't yelling, just trying to make sure the words are seen).

Typically your statement "cuts" 20ish days before it is due. If you look at your statement it usually has "Statement Date" listed on it somewhere,  most of mine put it in the top right corner or top line of the statement summary (where it shows beginning balance, ending balance, amount paid/spent since last statement).

Once you know what day your statement is generated, next you'll want to check to see if the card you leave a balance reporting, reports the statement balance or the balance on a given day (US Bank reports the balance on your card as of the last day of the previous month -- so US Bank reports your balance on December 31, 2021 when they report to the credit bureaus around January 5, 2022, not the statement balance from December 17th).

So for ease of use, basically do what you've been doing to cause your cards to all report $0, but leave $10 or so to report on one card (major credit card Visa/Mastercard) store cards and some AmericanExpress cards tend to cause an all $0 penalty even though you left a balance to report. 

Hope this helps!