Paid off credit card and credit score has gone down as a result!

[caramond]

I had a fair bit of credit card debt between 2 different cards until this summer. I was able to pay off the last one in September.

I've just checked my credit score after it updated in October and it's gone down 3 points. The explanation for it going down says it's because I'm using 0 of my available credit and that using at least £185 would improve my score. 🙃 This doesn't really make any sense.

I actually still use one of the cards but pay it off before any interest is due. Is there something else I should be doing?

My score is still Good and I'm not going to be applying for any new loans or credit for the foreseeable so maybe it doesn't matter?

Just set up a direct debit to pay off the card in full, then spend a bit on it every month. We use a cc for day to day spending to get cash back/points and it’s automatically paid off in full every month. Assuming you can trust yourself not to splurge of course.

on the face of it it doesn’t make sense. It makes perfect sense if you look at it from the creditors point of view. You need to have a certain amount of credit in order to maintain a good credit score. They want people who take out credit but aren’t too high a risk. if you don’t have any/much credit how would they know if you are a safe bet to lend to and hence affecting your score.

i find mse website is handy for information if that might be any use

This is so stupid! When younger I couldn't get a store card because I had paid off my credit card so didn't have any authentication that I was a secure payer. Since then have had credit cards and paying off monthly and strangely no problem! Think it must be if you're registered and seen to be a responsible payer. Crap system which needs to change. X

Your credit score is meaningless. It's an arbitrary figure that these companies use to put the information in a way it thinks you'll understand. Nobody, other than you, can see the score, it literally means nothing. When applying for credit the company can see your credit history, not your score, and it'll mark you internally against their own criteria in determining whether to give you a loan/credit card etc. Don't panic about your score at all.

It doesn't make sense but credit scores also don't matter because outside the credit reference services, it's a meaningless number. They just want to either sell you a pointless paid service or target you with adverts while you look at your credit history and score (I use a free service and it always tells me I could save money by transferring credit card debt which isn't true because the credit card debt I have is all on zero fee 0% interest deals with the money to pay it off sitting in a savings account paying 5% so I'm making a profit out of the arrangement).

If you apply for more credit, the lender will use it's own criteria to assess the risk of lending you money, so the best thing you can do is to just use a credit card for some of your normal spending and pay it off each month by direct debit.

It doesn't matter. Just ignore it.

I'm in a slightly similar position - I had to take out a cc which I didn't want but set up a DD to get it paid off each month.

Don't like it but it does mean you have something on record. Yes it is crazy but it's just the way it works.

Also are you on electoral roll? That bumps it up. It's a long term game so go with it, linking my current account to Experian bumped it up a bit.

Don't worry about it too much, a period of good credit really helps.

I had similar earlier this year when I paid off my car - my experian went down from 999 to fair. I was so pissed off and it did impact other things. Curries (who I had a 5k credit limit with) wrote to me informing me this was being reduced to £250, leaving me worried what other businesses/agencies were now aware of my shit credit rating.

Don't worry about it, mine went up from fair to good pretty quickly