Does having a negative balance affect your credit score?
 

I've been lurking the forums for a while, but I'm still relatively new to the whole credit and travel scene. While I feel like I have a pretty decent understanding of managing my credit, keeping an eye on my credit score recently caused me to doubt myself and I figured I would ask for some advice.

I don't have that long of a credit history, so that may be more volatile and large fluctuations maybe result because of that reason alone.

Ever since Amex started providing a FICO score, I've watched it and my most recent score went from 741 to 727 in a month. I haven't applied for a new card since I last picked up a Amex PRG in July and I haven't knowingly did anything that would perform a credit check. The only other regular payments I have are my car payment and my student load payment which I pay monthly but I don't actually have anything due until December.

I don't know if its a coincidence or not, but I have a BoA Travel Rewards Credit Card that I opened earlier this year before I went on international trip to avoid foreign exchange fees. I don't use it too much since I doesn't offer me the points I'm trying to collect for my long term goal, but for some reason I acquired a credit on the card. I've used it little by little, but I still haven't used it all and I've just noticed that BoA has been marking my bills as unpaid, despite me not owing anything. I spoke to a representative about it and was told that I was fine, but it seems to have lined up with my dropping credit score. I pulled my free credit report back in February, but does anyone think its worth the $12.00 x 3 bucks to get a more in depth look into this? It could be from other reasons but perhaps someone else has experience with this. I'm leaning towards paying for a credit report to make sure there isn't any fraud happening, but I might just be freaking myself out.

On a side note, something else I do is I typically pay off the majority of my balance before my statement closes, or gradually as I go throughout the month to help prevent myself from spending past my means. Sometimes the statement balance is also negative. Is this a bad behavior, credit score wise?

No. A negative will report as 0. To determine the cause(s) of any scoring change you have to carefully review reports from before and after the scoring change. Applying for a new card is far from the only thing that would cause a score reduction. Additionally, I recommend setting a threshold of at least 20 points. Differences in reported utilization can easily account for such scoring changes.

Again, reviewing reports before and after any change is the only way to determine the causes. If you don't want to have to pay for multiple reports you can also use a monitoring service that offers the frequency of pulls that you need. You've only been looking at your Experian FICO 8 score from AmEx. Have you been monitoring any other FICO's for the other 2 major CRA's?

Experience doesn't really matter. What's on your reports and how that data changes is what matters. We can provide all sorts of possibilities but that won't really help to determine the cause(s) in your specific case.

Your credit score naturally fluctuates from month to month and a 14 point swing is not very much. There are many possibilities as to why this might happen, but I certainly wouldn't let it worry me. If it was a large difference, I would look into it further, but not for 14 points.

Some banks won't report at all if the acct is dormant. This is very different from a derogatory mark. I highly doubt BoA is reporting "unpaid."

Common wisdom dictates that lower util is better than high util. But paying down all credit cards mid-cycle can lower your score since it looks like you're not using your revolving credit responsibly (that is, at all). Link