Why did my credit score drop?

Question

I just payed off a credit card. It was over $200 That i payed. It just reported on my credit report but also at the same time my score droped 13 points. I was also givin an increase in my credit limit at the same time. Can anyone explain why it went down?

Answer 1

Sure.  Keeping a small balance on a credit card is actually better than paying it completely off.  It shows that you have credit, use credit responsibly, and can maintain low balances.  I bet if you keep just a 25% balance on your card, you will see your score jump back up.

Answer 2

FICO scores are optimal when your credit usage is 1-10% of your available credit. Since you paid off everything and didnt use the card, the balance reported was $0 which is considered you are not using your credit. Try keeping your card usage between 1-10% of your total credit limit and you will see the points back up. Credit bureaus like to see ppl use credit.

Answer 3

take a  month for your activity to affect your credit score in most cases

Answer 4

Look at the mix of your credit cards as well.  Keep the ones that you have had for a very long time - length of credit helps too!

Answer 5

If you just paid it off and your limit was increased, that hasn't had time to be reflected in your score.  Give it another 30 days.  Also, it is very normal for scores to fluctuate.

The people who are telling you to carry balances to get a better score are passing along an urban legend.  A large part of your score is basd on the ratio of credit card debt to available limits.  Carrying balances of more than 30% hurts your score.  

The best thing you can do to improve your credit score is to use your credit card and pay it in full every month.  This will give you a good payment history -- which is what builds your score.

Answer 6

Try this one - http://creditreport.fateback.com - I monitor my credit score here during last 3 years. And also cleaned off some bad items from my credit report. You can apply for free initial plan and get your scores and reports for free.

Answer 7

Don't listen to the advice that keeping a 25% balance on your cards raises your score.  This is simply false.

If your FICO score is under 700, you want your balances between 1-9% of your limits for your optimum score.  If your FICO is over 700, you want your balances at 0%.

Drop points are roughly every 10% until you hit 50% then it goes to 75% then 100%.

P.S. If you did not get your "score" directly from MyFICO, it's probably not your true FICO score and should be ignored for credit scoring purposes.