Help! I paid off all my credit card balances and my FICO score dropped 90 points!?

Question

I'm planning on getting a house soon and I thought I'd give my FICO score a boost by paying the $5500 I owed last month, but when I checked my score this month (nothing else changed) my score was down 90 points, did I do more damage than good? seems very strange to me (I get my FICO score every month, and like I said, I haven't applied for anything, or done anything to my credit in the last year, I did have revolving balances and was using normal credit, but this is very unexpected!!!

Please notice that I just paid my CC balance, I did not cancel my cards, So I have a lot more credit available now.

Answer 1

Who are you pulling your scores from - myFico or from a credit monitoring service?

If it's through anywhere but myFico, that would probably be the problem as those other companies are not always accurate.

You definately should have gotten a boost from paying that amount off.
And no, available credit does not drop scores.

You should order your reports, if you haven't already, and go over them thoroughly. Even check the hard pulls.
Look for anything and everything.

Don't use the tri-merge reports - they are generally as inaccurate as the scores they offer. Use reports that you get from each CRA.

I use True Credit to monitor my reports and the scores are usually far off from the real scores from myFico.
The credit reporting part of it is sometimes incomplete and sometimes wrong compared to the real reports from the CRA's.
Which is odd since True Credit is a Trans Union affiliate lol.

Answer 2

I had this happen to me. I've been rebuilding my credit since a divorce several years ago. I noticed that if I paid my only credit card down to a zero balance FICO discounted it all together and computed my score as if I had no credit card at all. This caused a serious drop in my score. When I left a small balance on the card from month to month the FICO scoring model picked up the account and gave me points for having a credit card. This improved my score. Try leaving a small balance on your card each month to see if that fixes your FICO problems. Good Luck.

Answer 3

A 90 point drop in one month for what you describe I don't think is possible. That is usually associated with delinquency.
But it is almost impossible to "manage" a credit score, ie do X and score changes Y.
I would suspect your score should move back up over the next few months.
Pay off any small balance accounts. Only use one or no cards, even store and gas cards. Do not make any inquiries.

Not sure what your score is, but at some level the rates on mortgages bottom out, so it may be a moot point.

Also keep in mind the mortgage company uses its own scoring system which would look at debt to income and utilization, which in your case would be positive

Answer 4

What is your limit and balance on the Chase credit? If you paid off the car the other day, it wouldn't have even hit your credit report yet, so that isn't it Have you applied for new credit? Might be a good idea to get a hold of your credit report to see if there is any activity on there that shouldn't be that is dragging your score down by 30 points.

Answer 5

the fico score is fairly complicated and many things affect it. one thing is the amount of available credit you have relative to your debt. the more credit you have available, your score may go down. your score may have gone down because now you have more available credit. do an online search to see which things lower or raise your fico

Answer 6

It can take up to three months for it to show up. If you are getting your house soon give them a copy of your bills you paid to show them they are no longer on your credit file.

Answer 7

I echo ECHO'S answer.

or just repeat it