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Don't Understand this Scoring Process

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Anonymous
Not applicable

Don't Understand this Scoring Process

I  wanted to monitor my score after my international trip, in which I did lot of shopping on one of my credit card to avoid taking large sums of local currency.  When I came back from my trip I saw my score was in the 689 range, as I had signed up for my free monthly service with Myfico.  I had a large balance on one of my Credit card due to my shopping, which I am planning to pay off in the next 2 months.  In few weeks to my surprise I saw my score actually jumped up to 9 points to 698 eventhough I had large balances on my CC.  Then few days later despite me sending a big check towards my debt, my score decreased drastically about 35 points.  I am totally confused on how the scoring process works, I am also planning to apply for mortgage(refi) this year and want to bring my score back to low 700s before I do that, however it is surprising that as soon as I start paying my debt down, my score also seems to be decreasing.    I would appreciate any suggestion or possible causes from the group on my case.
Message 1 of 6
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Anonymous
Not applicable

Re: Don't Understand this Scoring Process

Did you pull a full report at any time before the drop? If so, you can just pull a full report now and compare to see what's changed.

 

If you were using Scorewatch, did you have an alert on the days your cards changed? Balance increases and delinquencies should generate alerts, balance decreases and accounts aging / falling off your report do not.

 

It could be lag time. Scores tend to go up with time - maybe an account became a year old for that 9 points, for instance, and the 35 point hit came when the card posted the big balance from the trip. This could be particularly true if the card is AMEX, because they usually report the status of your account two months ago to the credit bureaus. In this case, your score should go back up when the check posts to the credit report.

 

It could also be something like goodies falling off your account (say, an account you closed ten years ago that was holding up your average age of accounts) or baddies being added in late (say, a company just now reporting a late payment from six months ago).

 

 

 

Message Edited by JESMONT on 02-23-2009 01:43 PM
Message 2 of 6
kjm79
Valued Contributor

Re: Don't Understand this Scoring Process

Did you regularly use the CC you took on vacation.  I had a CC that I literally used for emergencies only.  It hadn't been used in about a year and half (wouldn't dream of doing that now with all the card closures and CL deccreases) and I needed new tires so I used it.  I initially saw an increase with the alert stating I showed recent activity on a card that hasn't been used (there was a more technical term but can't remember right now).  Then a few weeks later my score dropped, the alert showed the same card info as the increase alert but the reason for the drop was the increased balance.  I paid it off and the next time it updated, point increase because no balance.  It's crazy.  I think I ended up 3-4 points ahead of where I started in the first place.  These scores definitely take you for a roller coaster ride.

CH 7 Filed 7/27/15 Discharged 11/16/15
Starting Score: EQ 620 TU 568 EX 593
Current Score (07/13/16): EQ 674 TU 649 EX 674 (FICO's 08)
Cap1 QS ($5350) (Combined QS and QS1) Discover It ($4100) MilStar ($8,600) Fingerhut ($800)
Off to the garden 05/01/16
Message 3 of 6
Anonymous
Not applicable

Re: Don't Understand this Scoring Process

Thanks for your suggestion, I will try to compare both the reports and see what occured.  I know I got one alert as I had used one of my other old store card to charge something very nominal as I was in that store but again the drop of 35 pts to me means that I commited a crime or something.
Message 4 of 6
smallfry
Senior Contributor

Re: Don't Understand this Scoring Process

Free myFico service huh?
Message 5 of 6
haulingthescoreup
Moderator Emerita

Re: Don't Understand this Scoring Process


indianinnj wrote:
I  wanted to monitor my score after my international trip, in which I did lot of shopping on one of my credit card to avoid taking large sums of local currency.  When I came back from my trip I saw my score was in the 689 range, as I had signed up for my free monthly service with Myfico.  I had a large balance on one of my Credit card due to my shopping, which I am planning to pay off in the next 2 months.  In few weeks to my surprise I saw my score actually jumped up to 9 points to 698 eventhough I had large balances on my CC.  Then few days later despite me sending a big check towards my debt, my score decreased drastically about 35 points.  I am totally confused on how the scoring process works, I am also planning to apply for mortgage(refi) this year and want to bring my score back to low 700s before I do that, however it is surprising that as soon as I start paying my debt down, my score also seems to be decreasing.    I would appreciate any suggestion or possible causes from the group on my case.

My guess is that you're looking at the built-in delay in lenders reporting to the credit bureaus. Most CC's (exceptions: US Bank and HSBC/ Orchard) report to the credit bureaus on your statement date. You might have been seeing big balances display, but the credit bureaus didn't have this info yet. Then, after you paid, you were looking at low or $0 balances online, but the payment had not yet updated.

Your scores are generated off your reports, so regardless where you are real-time, for scoring purposes, it's what's on the reports, and those get updated once a month.

To add to the excitement, American Express reports your statement balance, but it doesn't send this info in to the bureaus until four weeks after your statement date, meaning that the credit bureaus are always nearly two months behind on your actual AmEx balance. So if you used your AmEx for your traveling expenses, and those expenses showed up on your statement, it will be two months before they are off your reports, and therefore, stop affecting your scores.


eta: sorry, should have elaborated that US Bank and HSBC/ Orchard update the balance that shows on the last business day of the month, rather than the statement balance . I think that US Bank reports pretty quickly, but HSBC/ Orchard seem to wait a couple of weeks. And sometimes they skip a month entirely. Smiley Tongue
Message Edited by haulingthescoreup on 02-23-2009 06:15 PM
* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
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