Understanding FICO® Scoring

[TeeandDee]

My EQ FICO score tanked today.   Received a notice from SW that said the following as the reason:

This score decrease may be caused by these 4 new reasons:

• You have a short credit history.
• You've recently been looking for credit.
• You have too many credit accounts with balances.
• You have not established a long revolving credit history.

So now my Eq FICO score is 650.  I was shocked and sadden by this news.  I have two more cc's that still has not reported yet (Discover More and Best Buy), which I'm afraid once they begin reporting, my score will tank even further.     So my question is....how long will it take for me to recover from all this?? I'm praying that it will only take six months.  I will be able to get my UTL back down by the end of next month which then I plan to only have one card report a balance which will be by Best Buy card because I purchased a computer with the 18 month finance deal.  Will my FICO score increase some after that...or do you think it will take six months to a year?  So shocking to see it tank like that.    

Oh also, I have no baddies, no late payments..  Clean report other than new accounts and inquiries.

[llecs]

What caused it to drop? Was it the Best Buy CC? How many points were lost?

[JenniferinFL]

Deleted because I'm in no position to give advice.. lol

[TeeandDee]

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llecs wrote:

What caused it to drop? Was it the Best Buy CC? How many points were lost?

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Thanks for responding llecs....  The only reason SW gave for the drop are the ones I cut and pasted in my original post.  My Best Buy cc did not even report yet, so it was not that, but I'm afraid it may tank more when it does report...lol.  My EQ FICO was 679 and fell to 650.   I still have Best Buy AND Discover More that haven't hit my report yet, so I'm so afraid that when they do...it will drop even lower.  YIKES!

[llecs]

Well, you can rule out new accounts, new baddies, updated baddies, etc. You can't rule out the possibility of dropped accounts which could have impacted AAoA and/or length of history, increased util if a CL got cut, or rebucketing (unlikely). If really wanting to know, pull EQ from somewhere. My vote is that something dropped.

[TeeandDee]

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llecs wrote:

Well, you can rule out new accounts, new baddies, updated baddies, etc. You can't rule out the possibility of dropped accounts which could have impacted AAoA and/or length of history, increased util if a CL got cut, or rebucketing (unlikely). If really wanting to know, pull EQ from somewhere. My vote is that something dropped.

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My AAOA is only 3 months, and my Credit History is 1 year 3 months so I guess that's what caused it to tank, but  if that's what it is, then it's puzzling because that's been my AAOA for a while now.  After my last two cards begin to report, I will check my score again and see what happens.  After that, I will just have to ride it out and hope that my FICO score jumps back up after a while. 

[MarineVietVet]

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TeeandDee wrote:

My AAOA is only 3 months, and my Credit History is 1 year 3 months so I guess that's what caused it to tank, but  if that's what it is, then it's puzzling because that's been my AAOA for a while now.  After my last two cards begin to report, I will check my score again and see what happens.  After that, I will just have to ride it out and hope that my FICO score jumps back up after a while. 

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I know it's probably small comfort right but for scoring purposes it's built into the system that your AAoA can never be less than 1 year.

Just a FYI.

[TeeandDee]

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MarineVietVet wrote:

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TeeandDee wrote:

My AAOA is only 3 months, and my Credit History is 1 year 3 months so I guess that's what caused it to tank, but  if that's what it is, then it's puzzling because that's been my AAOA for a while now.  After my last two cards begin to report, I will check my score again and see what happens.  After that, I will just have to ride it out and hope that my FICO score jumps back up after a while. 

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I know it's probably small comfort right but for scoring purposes it's built into the system that your AAoA can never be less than 1 year.

Just a FYI.

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What do you mean? I'm confused as to what you mean that it can never be less than 1 year.  Are you saying that's why my score tanked? Or that my AAOA can't be only 3 months, because that's what my credit report says.... AAOA is 3 months...and my Credit Length or History (I forgot how the title on the report) is 1 year and 3 months.  Can you clarfify for me?  I'm still learning! 

[MarineVietVet]

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TeeandDee wrote:

 

What do you mean? I'm confused as to what you mean that it can never be less than 1 year.  Are you saying that's why my score tanked? Or that my AAOA can't be only 3 months, because that's what my credit report says.... AAOA is 3 months...and my Credit Length or History (I forgot how the title on the report) is 1 year and 3 months.  Can you clarfify for me?  I'm still learning! 

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Your report can say it's only 3 months but FICO will never score an AAoA less than 1 year. The folks who originally figured out all those formulas built that in. So that actually helps you.

[llecs]

OP, check your credit history again and AAoA. Are you saying your oldest, opened or closed, is 15 months old? And your AAoA is 3 months? In order for AAoA to be at 3 months, you would have had to open at least 5 new accounts within the past month, or 1+1+1+1+1+15 = 20. 20/6 = 3.33 months. Opening that many will have a negative impact on score. Are you sure these new accounts haven't reported yet? And ditto to MarineVietVet. FICO rounds down AAoA to the nearest whole number. It doesn't report AAoA in months, only years.