Why did my credit score drop 22 points after I paid down my credit cards?

[nichrocks]

I have credit cards with a total available usage of 108,000.  My score was 835 and I owed aproximatly 2%.   leaving around $300:  I did a balance transfer to my discover, paying it off and leaving a credit balance to a 0% business card which doesnt report to my personal credit and paid off the other balances on various cards except for around $100 on each of 3 different cards.. I didnt close any accounts The only other change was an additional hard inquiry for the 0% card I applied for.  My report now says I am using 0 of my available balance but my score dropped dramatically.  Why and what should I do to bring it back up?

[SouthJamaica]

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@nichrocks wrote:

I have credit cards with a total available usage of 108,000.  My score was 835 and I owed aproximatly 2%.   leaving around $300:  I did a balance transfer to my discover, paying it off and leaving a credit balance to a 0% business card which doesnt report to my personal credit and paid off the other balances on various cards except for around $100 on each of 3 different cards.. I didnt close any accounts The only other change was an additional hard inquiry for the 0% card I applied for.  My report now says I am using 0 of my available balance but my score dropped dramatically.  Why and what should I do to bring it back up?

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What are the balances in your reports as of the date your score dropped from 835 to 813? 

[JoeRockhead]

Probably just a combination of the HP and an all 0 penalty. Basically they're penalizing you for not using your credit. Silly I know, but it's definitely a thing none the less. Any balance reporting that is .05% or less has the likelihood of counting as 0, so for optimum scores allow between a .06% to 4.8% on one of your cards to report. You should see your scores get back up in no time. 

[nichrocks]

Home depot 137 of 2000 available 

Discover 153 of 5400

The hard inquiry made my total 12 on experie ( a few less on the others) but 3 drop off in the next 2 months. 

[nichrocks]

So I should have a small percentage on each card? Or overall?

[SouthJamaica]

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@nichrocks wrote:

Home depot 137 of 2000 available 

Discover 153 of 5400

The hard inquiry made my total 12 on experie ( a few less on the others) but 3 drop off in the next 2 months. 

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I meant what were the reported balances after you paid off Discover. You said there were 3 cards with $100 balances. Had they all reported? Who were the lenders?

[Anonymalous]

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@nichrocks wrote:

So I should have a small percentage on each card? Or overall?

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The simplest way to have a small percentage report on a single card. That's called AZEO, or All Zero Except One. Though it doesn't have to be exactly one, as long as it's less than half your cards (don't count AU cards). E.g. have 1/6 or 2/6 cards report a balance, but not 3/6 or more. And for balances, typically the lower the better. Both overall utilization and utilization on each card matter -- for instance, if one card reports a balance of over 50%, even if overall utilization remains low, you'll see a bit of a drop. But utilization has no memory, so if you pay off that balance, your score will bounce back as soon as it's reported to the credit bureaus.

But I find it's too much work to optimize my score all the time. Avoiding the all zero penalty is useful, and keeping utilization manageable is good (which happened naturally once I increased my limits), but unless I'm planning on applying for credit in the next month or two, I let my scores fluctuate a bit. They typically vary by less than a dozen points, and since my scores are pretty good, it doesn't really matter.

[nichrocks]

I was mistaken when I said 3 cards w balances. I only had the discover and home depot balances which were reported 

[nichrocks]

I did have a small balance on the 2 cards though

[DONZI]

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@nichrocks wrote:

The only other change was an additional hard inquiry for the 0% card I applied for.  My report now says I am using 0 of my available balance but my score dropped dramatically.  Why and what should I do to bring it back up?

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Do you mean that there was a HP for the new card and  the new card is already reporting it's zero balance?

I'm not certain, but IIRC there is a score drop for the HP for applying/accepting typically, then once the new account is reported, another drop. Other than that, I've read about >800 scores sometimes having exaggerated score adjusts.

Easy was to bring the score back up is just to go on with life and check the score again in some months.

..then there is AZEO and it's varients.