Credit Cards

[scanlin]

Last week I got a full copy of my credit report. Today I got a ScoreWatch notice that my score had dropped 27 points (708 -> 681). I logged in and got another full copy of my report. The only difference between the two reports is that an old (10 years) paid-off installment loan had aged off the report. My score dropped because of the absense of this previously paid-off 'good' loan.

My situation:

-- 23 year credit history, zero negatives

-- 14 accounts, average age = 10 years

-- 9 accounts have balances:

  -- 4 installment (1st mort, HELOC w/large balance, 2 unsecured loans used for business)

  -- 5 revolving (too many, I know)

The balances and CLs on all 14 accounts are identical for the 681 score and 708 score. The only difference between the two credit reports (which were taken 5 days apart from each other) is that the higher score (708) report contained a 15th account, which was a 10 year old $430K installment loan (mortgage) that had been paid off (last activity 10 years ago). The lower score (681) report did not have this paid off installment loan (because that account just clicked over to 10+ years old and so aged off the report).

Reasons I can think of for a 27 point drop:

(1) I no longer have any paid-off installment loans (the 4 remaining installment loans all have balances)

(2) My average account age went down with the removal of a 10 year account (although the "Understanding Your Score" section lists "average age" of 10 years for both the 681 and 708 scores)

(3) The large size ($430K) of the paid off installment loan was helping me; now it's gone

(4) I'm now violating a % of accounts that have balances rule that I wasn't before (9 out of 14, vs 9 out of 15)

(5) I got re-bracketed (is there a "has never completely paid off a mortgage" category?)

Anyone else had a 27 point drop caused by a good account aging off your report?

One of my 4 current installment loans has a small balance ($4K) and I'm going to pay it off to see what happens. That will change my ratio of 'accounts with balances' from '9 out of 14' to '8 out of 14', as well as put a paid-off installment loan on my report.

Other suggestions or ideas?

[hateAshbury]

my student loans recently were transferred from "Servicer A" to "Servicer B". For a few months, none of my loans reported, and I had a 10-point drop, although everything else in my credit profile -- AAoA, utilization, payment history -- improved. I expect that when Servicer B starts reporting, I'll get that 10 points back, and maybe an additional point or two.

[MustangSaluki]

Something doesn't add up. With that high AAoA and only 5 revolvers (5 is not too many by any means) your scores should be really, north of 800. Are you carrying large balances on the revolvers and are they all relatively new? 

Pay off the four highest revolving balances and let around 2-3% utilization report on the one last one with highest credit limit. My guess is you are getting dinged on the % utilization side of the house. 

[scanlin]

Yes, I have balances and high util %s. I know I need to reduce the amount of overall debt. but the point of my posting was that the ONLY change between the 681 and 708 reports which were taken 5 days apart from each other is that the 15th account is on the higher scoring report but had aged off of the lower scoring report. We can attribute all of the difference to that single change. Or else I tripped some ratio, as mentioned in the original post, by not having that 10 year old paid off mortgage account any longer.