42 Point Drop?!?!? C'mon!

Anonymous · ‎08-07-2007

I moved a credit card balance with a 9.9% APR to another credit card with a 0% APR, and my FICO score PLUMMETED! I considered this to be a *smart* move and now I'm being penalized. What gives?

chartley3 · ‎08-07-2007

It most likely showed a spike in the Util of the CC that took on the balance transfer and the card you moved the debt from hasnt reported the new balance yet.

Anonymous · ‎08-07-2007

Thanks for the explanation. Can I expect to see a 42 point increase when the card I moved the debt from reports the new zero balance?

Anonymous · ‎08-07-2007

Maybe...maybe not. Your score will recover eventually but it may not be all in 1 chunk. It may take a couple months to gain everything back.

Anonymous · ‎08-07-2007

Thanks for replying. It just fries my banana that the CRAs are so quick to lower my FICO score, but will not necessarily be so quick when it's time to correct it. #%$@!!!!!!!!!

Anonymous · ‎08-07-2007

Why would they want to help you? Keeping your scores down means you have to spend more money with their clients (the CC companies etc). That would be bad for busines.....

Anonymous · ‎08-07-2007

Do you have a recent inquiry as a result of getting the 0% APR card?

Is that card relatively new?

You will take a temporary hit if that's the case, probably lasting a few months.

Also, if your credit utilization on that new card is higher (not total, but just that card), you are probably penalized for that too.

At any rate, like the person above said, you should be at least somewhat recovered once the other card reports balance paid.

This is not the fault of the CRAs, it is the fault of the CC issuers. They like to report new large balances on their cards soon, so your score will take a hit, so you will be stuck with them.

As usual, in a case like this it is better to have a larger credit line than smaller.

Anonymous · ‎08-07-2007

Another factor if you transfered the balance from a card with a high limit to one with a lower limit you could be hit with a percent utilization penalty. I know some people will say its only the total usage that counts, but I have talked with many mortgage brokers that say it is both individual ratios and total that count.