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Will Score Rebound?

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Anonymous
Not applicable

Will Score Rebound?

I have been building my credit back up for the past 18 months, and was extremely pleased with myself that my credit scores were all in the 700's where two years ago they were under 600.  I've kept my credit card utilization under 5%, and everything was great.    

 

I was preparing to put my house on the market, and charged about $5000 in finishing touches to make my house have greater curb appeal and demand top dollar.  It was money well spent as I'm in escrow with a purchase price OVER asking.

 

However, my credit score -- dropped almost 100 points when the utilization spiked to about 55%  -- I've carried that for 60 days and will be paying it off as we close escrow.

 

Question -- Can I expect my credit to rebound back to where it was before I charged the $5000?  It brought tears to my eyes to see those hard earned 700 scores drop into the low 600's.

 

bdd

Message 1 of 6
5 REPLIES 5
redbeard
Frequent Contributor

Re: Will Score Rebound?

If I understand correctly, you'll get the points back for utilization without a problem.  It sounds like a larger point drop then should have occured, but utilization does play a big role.  

 

If you maxed out (or almost maxed out) a card or 2, the point drop makes more sense.

 

Once the house closes, you will also lose your active mortgage account.  It will report closed.  This will likely cost you a few points, so figure you'll get the utilization points back completely, but you'll still end up 10 points lower because you don't have an active mortgage account any longer.

 

Of course, this all depends on what else is in the credit file.

 

Dan

 

Just trying to get my scores to rise from the dead......

Wait.... I think I just heard a heartbeat!

Message 2 of 6
-NewGuy-
Moderator Emeritus

Re: Will Score Rebound?


@Anonymous wrote:

I have been building my credit back up for the past 18 months, and was extremely pleased with myself that my credit scores were all in the 700's where two years ago they were under 600.  I've kept my credit card utilization under 5%, and everything was great.    

 

I was preparing to put my house on the market, and charged about $5000 in finishing touches to make my house have greater curb appeal and demand top dollar.  It was money well spent as I'm in escrow with a purchase price OVER asking.

 

However, my credit score -- dropped almost 100 points when the utilization spiked to about 55%  -- I've carried that for 60 days and will be paying it off as we close escrow.

 

Question -- Can I expect my credit to rebound back to where it was before I charged the $5000?  It brought tears to my eyes to see those hard earned 700 scores drop into the low 600's.

 

bdd


Welcome to the forums. If that utilization spike to 55% is the sole reason that your scores dropped, then yes, they will rebound once the UTIL is paid off. Luckily the scores themselves have no memory of UTIL.

Message 3 of 6
Anonymous
Not applicable

Re: Will Score Rebound?

Thanks for the reply.

 

Yes, Discover card with 5500 limit was brought up to 4200.   My existing mortgage doesn't report -- it's through a hard money lender at 13% interest and they don't submit to the credit agencies...   The NEW house that I'm buying is FHA and will report properly.  I missed out on having a stable mortgage on my credit the past 5 years.   

 

BDD

Message 4 of 6
Anonymous
Not applicable

Re: Will Score Rebound?

THAT was exactly my concern.    If the utilization drop was 80 points, I'd had for it to go up 20, and then 20, and 20, etc... over time as utilization stays low.

 

THanks guys for the responses... 

Message 5 of 6
newstart2010
Blogger

Re: Will Score Rebound?

We saw this on my husband's credit.  A drop of 60 points when his utilization went high, he gained back all of it when his utilization went back down.  as for the new mortgage, new accounts report differently on everyone's account.  eventually the mortgage will be a benefit to your score.  You might see a slight drop from the hard pulls for the mortgage company as they will pull 2 or 3 times, and a sudden increas in debt can adversely effect your score, but just temporarily if it does.

 

Congratz on getting out of the hard money loan!  Nice that they are there, but always hard to swallow that interest rate!  a conventional style lona will be a huge savings on your pocket, and the reporting on your credit will be a fantastic boost!  And congratz on being in escrow for over asking!!  That is fantastic!

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