Why does a credit score go down when you pay off your debt? I paid off my car and a small remaining balance on a home equity loan in January. The only debt we have is the remaining balance of our home loan (less than 25% of the value of the home) and my credit card generally shows a balance because we run all expenses through it and pay it off each month. It's our airline miles card and I put an absurd amount of money on it. The credit report shows us using less than 1% of our credit limit. So why would both of our credit scores drop by about 15 points since we paid off the car and heloc? This makes no sense to me.