Understanding FICO® Scoring

[andyaycw]

I'm about to be a Sophomore in college, and I got my first credit card about 11 months ago. I have two accounts with Citi (limits totaling up to $6000) and a history of 11 months. I just called Citi earlier today to request a lower interest rate, which I was approved for after being placed on hold several times. What disturbed me, however, was that the Manager I spoke with told me that I could not get a lower APR than the one they gave me all because of the fact that my credit score had been constantly falling - 20 points in the last month! I keep my utilization very low (less than 10%) and there are no negatives on my report. It seems like no matter what I do, even if I keep paying in full, on time, every month, while maintaining a low balance and utilization, it just doesn't seem to be working for me. It's as if my FICO keeps dropping with no good reason. Should I worry about this? It bugs me that I don't know why my FICO score is dropping. I am even considering purchasing my credit scores to see for myself how low they have gotten...

[CreditBob]

How many times have you applied for credot within the last 12 months?  Do you have any other kind of debt, such as student loans, personal (installment loan), car loan, or a mortgage loan? Will you let us know. The more information that you can pecifically provide the better, just in general. To also make youa ware any account is still considered new until it has reach 1 year old or has 12 months of payments being reported.

...

[CreditBob]

The other thing that i forgot to ask you, have you pulled a credit & fico score report before & after the points went down by 20?

[fused]

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andyaycw wrote:
I'm about to be a Sophomore in college, and I got my first credit card about 11 months ago. I have two accounts with Citi (limits totaling up to $6000) and a history of 11 months. I just called Citi earlier today to request a lower interest rate, which I was approved for after being placed on hold several times. What disturbed me, however, was that the Manager I spoke with told me that I could not get a lower APR than the one they gave me all because of the fact that my credit score had been constantly falling - 20 points in the last month! I keep my utilization very low (less than 10%) and there are no negatives on my report. It seems like no matter what I do, even if I keep paying in full, on time, every month, while maintaining a low balance and utilization, it just doesn't seem to be working for me. It's as if my FICO keeps dropping with no good reason. Should I worry about this? It bugs me that I don't know why my FICO score is dropping. I am even considering purchasing my credit scores to see for myself how low they have gotten...

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Pull your FICO scores/reports and see if something else is going on. Otherwise, not much we can do to answer your questions.

[andyaycw]

I pulled my scores 2-3 months ago and they were in the 680-720 range. The only things on my credit report are a student loan in the amount of about $2600, and two revolving accounts with Citi. I was actually monitoring my TU score which was 705 at the time (I don't remember the exact number, so give or take 10 points from that) and my balances were being reported as $200 and $0 for the two credit cards I had with Citi. I then charged $4 to the card which had a zero balance, and I updated my report the next day to find my information had been updated. It of course showed the $200 balance (credit limit at the time was $1800) and also showed the new $4 balance (credit limit was $2200 at the time). That was the only thing that had changed, so I was very shocked to find that the extra $4 balance made my TU score go down 20 points, from 705 down to 685. That was the last time I checked my scores, and since then I have gotten a $1000 CLI on both my Citi accounts and I have been keeping about the same balance I usually do, so my utilization should be even lower. It was because of this that I expected my FICO to have gone up from the last time I checked. Having my scores decrease, especially by 20 points in the last month alone, was the last thing I expected to happen. I do not know for certain exactly how many Hard Inquiries I have on my credit reports, but the two Citi cards I applied for were the last ones I ever requested credit, and my two accounts are 10 and 11 months of age now. So I have not had any inquiries in the past 10 months at the very least. If I had to guess, I would say that I have at most 4-5 inquiries in the past year combined. EDIT: So you do think that it is worth it by spending the $50 to check my credit reports?

Message Edited by andyaycw on 07-25-2007 05:34 PM

[fused]

Check your private messages, it's the small yellow envelop located at the top right on your screen. If you are this concerned about your scores, then yes yank all 3.

[CreditBob]

I am thinking that having 4-5 inquiries within 1 year along with reaching a cetain amount of balance on the account would mosy likely cause your score to drop. This is my opinion on what you should do. Keep doing what you are doing and get the balance down to 1-5% utilization and spend the $ 47.00 on the myfico site. But wait 3 months in doing so. The reason being is you want 12 months of payment history being reported on on your accounts.

[andyaycw]

Thanks for the message fused.

Now that I have pulled all three of my scores, I am left wondering if the Account Manager I spoke with was lying and simply trying to make an excuse to deny my request for a lower interest rate.

TU: 708

EQ: 726

EX: 715

All of those scores are higher than when I checked 2-3 months ago...unless my scores were really 20 points higher last month, I don't see what could have made them drop...

All my reports have similar negatives listed - my student loan of $2600 is hurting my score, I have a short credit history of only 11 months, and apparently I have too many accounts with balances (two accounts.)

Very strange, what do you guys think?

Edit: TU lists 0 inquiries in the past year, EQ lists 1, and EX lists 3.

Message Edited by andyaycw on 07-25-2007 06:05 PM

[fused]

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andyaycw wrote:

Thanks for the message fused.

Now that I have pulled all three of my scores, I am left wondering if the Account Manager I spoke with was lying and simply trying to make an excuse to deny my request for a lower interest rate.

TU: 708

EQ: 726

EX: 715

All of those scores are higher than when I checked 2-3 months ago...unless my scores were really 20 points higher last month, I don't see what could have made them drop...

All my reports have similar negatives listed - my student loan of $2600 is hurting my score, I have a short credit history of only 11 months, and apparently I have too many accounts with balances (two accounts.)

Very strange, what do you guys think?

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Sometimes CCCs look at a different type of FICO scores and they are called credit card enhanced FICO scores and this may differ from your myfico scores. I suspect with your short CC history, your CC enhanced scores might be lower. Don't worry your scores will improve with time. Besides your scores are quite good for a young person. Nothing to sneeze at here. You paid a little bit money and you should feel relieved.

[andyaycw]

I am glad I paid the small fee for some peace of mind. I just want to say a big thanks to everyone who helped though, I really appreciate it. I feel a bit silly now that I realize that I was worrying over nothing...