BoA Sig Visa reporting balance and Score Watch credit score drop

[wollepopolle]

Ok, I knew that with my new BoA Signature Visa I'd risk a drop of my credit score. It had reported right after getting the card a month ago with a balance of $0 before any statement ever cut. Now, my first statement cuts and I thought I should let it report about $60 so that it is apparent on my reports that this card is used. I charged about $1500 through it and paid off most of it before the statement cut.

Now, I get a score alert: "2 of your accounts are reporting a balance increase" Then in the score watch it lists the BoA card twice with the same balance ($60). Is this an error of the score watch system or did BoA report twice? The account numbers are identical for the two entries on score watch.

Also, my credit score dropped a whopping 18 points from 764 to 748 just because of an additional $60 reporting. That seems odd and over the top. My utilization is low (4%) with less than $1000 reporting. Why would this tiny balance make my score drop so much?

[wollepopolle]

Update: I just checked my report and it said: Utilization 2%. I have a total of $605 reported on all accounts with an available reported limit of $38,000

It is really weird that such a small balance reported would hurt my score so much! Also, myfico tells my that my credit usage is "very good" not "excellent" anymore. Weird!

[AndySoCal]

Is your signature VIsa reporting a credit limit ?

Ignore my question I found the answer in another post.

I had the same experiece with Chase Signature Visa  no credit limit report and my score went down similiar drop as yours.  My utilization was under 5%.

[DI]

Just when we think we've figured FICO out it gets more complicated. 

[haulingthescoreup]

---

@wollepopolle wrote:

Ok, I knew that with my new BoA Signature Visa I'd risk a drop of my credit score. It had reported right after getting the card a month ago with a balance of $0 before any statement ever cut. Now, my first statement cuts and I thought I should let it report about $60 so that it is apparent on my reports that this card is used. I charged about $1500 through it and paid off most of it before the statement cut.

Now, I get a score alert: "2 of your accounts are reporting a balance increase" Then in the score watch it lists the BoA card twice with the same balance ($60). Is this an error of the score watch system or did BoA report twice? The account numbers are identical for the two entries on score watch.

Also, my credit score dropped a whopping 18 points from 764 to 748 just because of an additional $60 reporting. That seems odd and over the top. My utilization is low (4%) with less than $1000 reporting. Why would this tiny balance make my score drop so much?

---

It's because the card triggered two different alerts that you set --maybe dollar increase and percentage increase. You're not really being scored on two accounts. They keep thinking they've fixed this, and then it comes back again.

For the score drop, how many cards reported a balance before, and how many this time? And out of how many open CC's total, and how many accounts total? (Any open installment accounts have balances by definition.)

[wollepopolle]

Four out of five CC accounts reported balances. I guess that when you pay them all off before the statement cuts, then this will increase one's score. It is ridiculous, though, that the system works this way. After all, the normal course of action is that you wait for your statement and then pay it off. The small amounts that I had the cards report are miniscule, so I thought.

[haulingthescoreup]

Yes, it looks at util AND number of accounts with balances.

I agree about how normal people pay after they get their statement.

All these wacko things are there because someone crunched numbers in the past and saw that those with balances on multiple accounts were more likely to wind up defaulting on something. And the greater the number of accounts, the greater the likelihood, thus the increasing score dings.

Every now and again I decide it's silly to do all this, but when I lose 10-15 points for one extra card reporting, I go back to what I'm doing. And yes, since I'm not applying for anything that I know of any time soon, it doesn't really matter, but by golly, I worked to get my scores up where they are, and it bugs me to see them drop again.

[wollepopolle]

haulingthescoreup, thanks for your feedback. I am sure you're right about the double alert that I was sent from myfico.com

Unfortunately, I have yet another new account that will be added in a few days, my Discover. To be sure, I paid of the balance in its entirety before it'll report soon. I am sure I'll take another hit, having had three good old(er) CC accounts, and now having added a total of three new CC accounts in August, September and October.

I hope, though, that with a year of solid payment history on all these accounts my score will hopefully recover soon.

[haulingthescoreup]

Well, that's part of growing your credit. I did a long-planned app spree back in the spring of 2008 and lost 30-40 points initially, when everything hit.

They do come back , and then it keeps on growing, assuming that you don't keep apping and you don't accumulate any negatives.