9. You Pay Off All Your Cards at Once
Paying down high balances can help improve your credit score. But if you pay down all of your balances at once, your score could take a hit, said credit expert John Ulzheimer, formerly of FICO.
“This one is a bit tricky, but sometimes consumers will wind up with no activity on any card, and they see their scores go down,” Detweiler said.
How to avoid it: FICO wants to see recent activity on revolving accounts, such as credit cards. If you don’t have any utilization, your score can be affected. The impact is small, though, Detweiler said.
How to fix it: If you decide not to close credit accounts to keep your credit utilization ratio low, don’t shove those cards in a drawer and never use them again. “If you use them, it can help your credit because it’s showing activity on an account,” Kelly said. She rotates the cards she uses to keep them all active and pays the balances to avoid racking up interest.
