I worked with Fair-Isaac a number of years ago to develop a custom scoring model (in conjuction with their FICO scores) for a bank I was working for. From what I gathered,
one of the ways Fair-Isaac generates a score based on the data in a credit report is by first placing you into one of their credit profiling groups. These groups range from "young with little or no credit history" to "resposibile renters" to "maxed out suburbanite home-owners" to "experienced and responsible credit consumers" and quite q few others in between. Once you are placed into a group, your credit profile is then compare against others in this group. If you look good in comparision to others in this group, your score is higher-- if not, it is lower. This is one reason why very young people are who are very responsible with the limited credit they do have can quickly get a very high score-- they are being compared to all of the other young people who don't do so well.
You might not normally expect to see a dramatic change in your score by simply paying off a single credit card, but if paying it off places you in a different credit profile you could see a sizable change in your score (in some rare cases it can possibly even go downwards) because you are now being compared to a totally different group of people.
In this case, the group you just got placed in obviously has a higher average credit score than the group you were in-- which explains the sudden jump upwards of your FICO score.
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