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Topic	Is it myth that paying off your credit cards hurts your credit sorce?
Lunar_Savage 02/28/21 12:25:06 PM #28:	GregShmedley posted... It is not a myth. On three separate monitoring tools, my score dropped about 25 (average) points after paying off a couple high balance cards to $0. None were closed. Just did this two weeks ago. I expect my score to bounce back up in about a month or two; they will likely go higher if I used one of the cards for a small purchase and got a statement with a balance. The drops are usually negligible, but you can take hits for going to $0 balance without closing accounts. My personal guess is that it drops because you are no longer seen as a source of income with a balance of zero. So while your payment history is good while holding a balance, you get a boost to your rating since you are a proven reliable source of income for the company. When you have a good payment history but a balance of zero, you take a hit because the company sees you as a +zero on the balance sheet. I imagine you take a double hit with a bad payment history and zero balance or negative. --- Number of Mega Cookies given: (::::) 32 Tips top hat, adjusts monocle, and walks away with a cane. And yes, that IS Mr. Peanut laying unconscious on the curb <cite>Lunar_Savage posted [p:951180145] in Is it myth... [t:79319793]...</cite> <quote>GregShmedley posted... </cite> <quote>It is not a myth. On three separate monitoring tools, my score dropped about 25 (average) points after paying off a couple high balance cards to $0. None were closed. Just did this two weeks ago. I expect my score to bounce back up in about a month or two; they will likely go higher if I used one of the cards for a small purchase and got a statement with a balance. The drops are usually negligible, but you can take hits for going to $0 balance without closing accounts.</quote> My personal guess is that it drops because you are no longer seen as a source of income with a balance of zero. So while your payment history is good while holding a balance, you get a boost to your rating since you are a proven reliable source of income for the company. When you have a good payment history but a balance of zero, you take a hit because the company sees you as a +zero on the balance sheet. I imagine you take a double hit with a bad payment history and zero balance or negative. --- Number of Mega Cookies given: (::::) 32 Tips top hat, adjusts monocle, and walks away with a cane. And yes, that IS Mr. Peanut laying unconscious on the curb</quote> ... Copied to Clipboard!
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