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CC Balance = BAD SCORE ! ?
Well. I am REALLY REALLY surprised on what has happened few months back. Reason I am writing it now because I was trying to understand how EXACTLY it works.

I have few cards and I use them for business purchases. I have 5K Capital One and 5.2K Citi Double Cash. So I use them and usually I nearly max them out. I guess nearly 5K on each. But I usually pay even before bill comes online.

So few months back exactly same story I am purchasing stuff and what happen is this. I purchased something lets say on 10th all charges came in and cleared as pending on the card on 12th and let's say on 13th it's my billing period.

So all this time I had beginning balance of $0 and ending balance of $0 because I paid everything right away. But this time I didn't have time to do so, so my balance for a month wasn't usual $0 but let's say $4500. I paid balance right away like always for Capital One already reported my $4500 spending to CB.

Guess what happened ? My score dropped 94 points !!!!!

This is ridiculous. I mean may be I am missing something but isn't it a bit messed up ? I mean I pay like that ($0 to $0) because I wanted to and certainly I don't have to. Charges I made let's say in April I can pay in May just like in billing agreement. 28 days after bill comes.

So what up with this then ? Why in the world you punish people just for using your card ? I mean I am talking about CB in this instance not CapitalOne. I mean I didn't do ANYTHING wrong, I have 0 late payments, 0 accounts that have anything on them. like 5 cards all $0 balance and 1 card with $4500.

Overall credit utilization for that month was around 40% but for card itself was like 85%

Then I thought, okay guys if you kill me for having a balance like that I am sure you'll make me happy when you see next month $0 and everything is paid (again I pay 100% of the balance all the time just this time it overlap like that so they recorded balance)

So you think I got my 94 points back and then some ? WRONG !!!!

it was 3 month ago. Since then I have +3 , + 4 and +2 points. So +9 points 3 months. So let's calculate 94 points they took from me originally +9 point they added after balances are 0 everywhere. I am -85 in the hole.

I am speechless. Credit system is broken. I want to spent and don't worry about this stupid thing. Why in the world you subtract so many points based on purchases ? I understand if person didn't pay after 28 days THEN and ONLY then subtract some.
Even then I have a problem. What if balance is NEW purchases ?

Let's say I spent 4K, paid then spent ANOTHER 4k. So it's totally new charges yet on bill it'll be like it's same 4K .... do they even see old charges vs new and what's been paid ? Because after this I want to look all cards away and don't use them because I feel after another billing cycle that overlap my payment I'll have 500 score because when I started I had almost 800.

Any suggestions ? Thank you !

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Top Contributor
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it's very simple, any balance at the end of your billing cycle is reported to the credit agencies. we can argue about credit utilization and how it's unfair, but that doens't change they way they calculate scores. if you want to use your cards AND have good credit, pay it off (or at least way down) before the end of the billing cycle. 

Top Contributor
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Are you talking about the scores you see here on CK?  Because your FICO scores as far as Utilization is concerend has no memory.  You can can have 80% utilization one month and dorp 80 pts and the next month have 5% and it will come back.  Dont worry about the scores on here.  It is more of a training tool.  Your doing fine as long as your bringing it back down.

8 Contributions
1 Person Helped

Thank you for your answers. But I am trying to understand one thing. IF charges are new, and indeed just like normal person I wait for the bill and then pay everything at one and have balance of $0 why I am getting punished ? I mean I do understand If I didn't pay whole thing and I have like 50% of the credit used up then go ahead because I used my credit and I didn't pay whole thing. But even then that is why it's a credit card and not a charge card on top of the my bank indeed allows this sort of things because ...well once again this is credit and not charge card. And About Fico I'll give you EXACT numbers for FICO (From my Free FICO report on Citi Double Cash)....

Okay, In January I have 780 Points. Feb 690 points, March 721 points. I had balance only in February, that is when It overlapped on me. Why in March I have only 721 points when I paid whole thing. I really wonder about April score now.

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