I checked my credit score today and it took a massive dip compared to one month ago:
Ignore the gray line - it's immaterial.
I downloaded the credit report and compared it line by line with the report from last month. They are exactly identical, except for one thing: my revolving debt went from $16 to $0.
Can someone explain why the score would dip like this and whether there is anything I could do.
I wrote an article about FICO scoring which shows that 30% of your score is based on utilization or amount owed. I can't say exactly how much your score will rise, or how long it will take, but your score will improve dramatically from what you propose.
This chart is from Credit Karma, and it shows how zero utilization is actually bad when it comes to your score. I wrote an article on my blog titled Too Little Debt in which I discuss further.
Under 20% is ideal, just not zero.
Your case is an excellent example how no credit is scored similar to bad credit.
This curve is nothing unexpected (documented on many sites, including creditkarma) and can be un-done the next reporting period if you maintain at least 1% utilization.
myFICO folks recommend 9% for some reason I have never understood.
Don't worry: if the only reason your credit took a dip is because of your 0% utilization (as you say), it's only a matter of paying for your coffee using that dusty card.
