FICO Score down 9 points for "You've recently been looking for credit."

[CapiGirl]

In August of 2009, my FICO score on Equifax went from 806 to 797, where it remains today.  According to myFico.com, the reason given was "You've recently been looking for credit".  But I have not.  I have not applied for any credit cards or store accounts or loans of any kind.  Nothing.  And nothing appears in the inquiries section of my Equifax report to indicate that I have been looking for said credit.

So what gives?   Anyone else see this type of "explanation" before for a drop in score?

Much thanks in advance for any advice you can share.

[MarineVietVet]

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@CapiGirl wrote:

In August of 2009, my FICO score on Equifax went from 806 to 797, where it remains today.  According to myFico.com, the reason given was "You've recently been looking for credit".  But I have not.  I have not applied for any credit cards or store accounts or loans of any kind.  Nothing.  And nothing appears in the inquiries section of my Equifax report to indicate that I have been looking for said credit.

So what gives?   Anyone else see this type of "explanation" before for a drop in score?

Much thanks in advance for any advice you can share.

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Welcome to the forums.

FICO is a fickle and mysterious creature. I would not give 9 points either up or down a second thought. It will drive you crazy trying to figure it out. 

Just my 2 cents.

(myfico)
7/09 TU-742 EQ- 779
8/09 TU-765 EQ- 783
9/09 EX pulled by lender 802

CC interest free as of 8/09
"Hello my name is Sandy and I'm a recovering crediholic".

[haulingthescoreup]

When your scores are at that level, "recently" is a pretty flexible term. The formula is scraping the bottom of the barrel, looking for negatives.

When was the last time that you applied for anything at all? When was your most recent account opened? Do you still have any inquiries showing on that particular report?

[llecs]

To add to Hauling's questions, did you request a CLI from any of your CCs?

[CapiGirl]

Hi all.  I'm embarrassed about how long its been since my last visit to the forum ("forgive me forum for I have sinned").

To answer the questions about my 9 point drop:  no, I hadn't applied for any credit; nope, didn't have any hard or soft pull inquiries appear on the reports; I did not request nor did I receive a CLI on any account.  

A mystery is this FICO beast.

I'll share my experience since last year with my FICO score.

On February 14th of this year, AT&T did a hard pull on EQ because I bought an iPhone and signed up for a plan; 14 point loss.  By April 30, the score recovered. 

Just yesterday, I applied for a Pentagon Federal CU Visa Promise card and they also did a hard pull on EQ.  My score dropped only 4 pts this time.

I am not sure I'll get back to my all time high of 809.  I've had only 2 legitimate inquiries in 12 months, but somehow the explanation for the decrease in FICO is "you are seeking more credit".  In the case of the PenFed CC, indeed I was.  In the case of AT&T, I was just buying a phone.  Still, 2 inquiries in 12 months hardly qualifies as someone desperately seeking credit IMHO or trying pyramid or something. 

I think the main thing to know about FICO and applying for credit is to know when a company is going to do a hard pull.  I didn't ask the AT&T guy who was helping me buy and set up the phone.  Next time, I will request a soft pull, which just tells them your score and overview information, not the full credit history.  With the Pentagon, I was fully expecting it, as they only grant the card to those with "excellent" credit, and I'd already done the research and heard the stories of people being asked for their W-2s and paystubs and whatnot.  It's worth it for %7.5 card I suppose.

Another characteristic that may be influential is that I do not have a mortgage or revolving accounts, only credit cards (3 cards).  My credit history is between 18 and 21 years on the 3 bureaus.  I carry 0 balances, always. I use my cards, but I am meticulous about transferring funds to cover the balance BEFORE the billing period hits.  In this way, I get the benefits of the rewards programs without reporting any balances.  In other words, 0% debt is perhaps the *only* thing keeping my score high.  So any kind of change, such as a hard pull, or even a $5 balance, maybe makes a bigger impact than it would if I had a longer credit history, with more balances, and/or revolving lines??  

Anyway, that's my stab in the dark at to how my FICO scores are calculated. 

I hope you're all faring well through these "interesting" times with the credit industry. 

Ciao for now,

Angie

[smallfry]

From 0 to 2 seems to do the most damage. In the case of the phone FICO still unfortunately considers that a credit inquiry. Not fair I agree but you do have 2 inqs under 6 months old and for a score around 800 that might be considered a bunch.

[vanillabean]

smallfry wrote:

"From 0 to 2 seems to do the most damage. In the case of the phone FICO still unfortunately considers that a credit inquiry. Not fair I agree but you do have 2 inqs under 6 months old and for a score around 800 that might be considered a bunch."

I'd be interested in specifics. Something like for 750-799 1 inquiry drops 5 points, 2 10 points, 3 15 etc. For 800-850 1 inquiry 10 points, 2 20 etc. And after 3 monts the drop is at 75%, after half a year 50% etc. Might it work something like that?

Speaking of inquiries, I have a question regarding mortgage. Let's say the mortgage company transfers the service to a bank, The borrower of course has not directly requested the service of the bank, so does it make that the bank pulls a hard inquiry? (It counts separately if outside a certain window of time.)

[haulingthescoreup]

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@Anonymous-own-fico wrote:

@smallfry wrote:

"From 0 to 2 seems to do the most damage. In the case of the phone FICO still unfortunately considers that a credit inquiry. Not fair I agree but you do have 2 inqs under 6 months old and for a score around 800 that might be considered a bunch."

I'd be interested in specifics. Something like for 750-799 1 inquiry drops 5 points, 2 10 points, 3 15 etc. For 800-850 1 inquiry 10 points, 2 20 etc. And after 3 monts the drop is at 75%, after half a year 50% etc. Might it work something like that? ...

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Alas, it's not that simple. (If it were, FICO would go out of business, I suppose.) Many things influence score changes, including length of history --> score bucket, clean vs dirty reports, and so forth.

What many of us have found is that there is no ding for one inq, but you get one for the second. Then nothing for the third, but the fourth one will get you. Then after 6 or 7, no dings. (This is for inqs on just one bureau.) Or you might get dinged for the first inq but not the second, then the third but not the fourth, and so forth. HOWEVER, even if you don't get an inq ding, you will probably get hit for new credit and for dropping the AAoA. (The inq ding is for "seeking credit.")

[vanillabean]

haulingthescoreup wrote:

"What many of us have found is that there is no ding for one inq, but you get one for the second. Then nothing for the third, but the fourth one will get you. Then after 6 or 7, no dings. (This is for inqs on just one bureau.) Or you might get dinged for the first inq but not the second, then the third but not the fourth, and so forth. HOWEVER, even if you don't get an inq ding, you will probably get hit for new credit and for dropping the AAoA. (The inq ding is for "seeking credit.")"

Thanks. I didn't know about the "every other" mechanism.

Let's say that a year after the date of an inquiry is today. At which point can the bureaus be expected to acknowledge that? In a few days, or maybe after the end of the month?

[CapiGirl]

More update.

My new Pen Fed credit card account has hit my Equifax report.  Simultaneously, I accidently left a $45 charge on one of my other cards. I generally know exactly how to keep my reported balance at $0, but this month, my BART card renewed on the last day of the cycle and I didn't even know it was depleted.  Anyway, the score jumped back to 806.  I'm not sure now if the $45 balance caused the increase, or the new credit card. 

Meanwhile, on Experian, the new account appears, along with the $45 balance on the other card, but the score remains at 795.

I haven't bothered to check TransUnion yet.

Still can't figure out the rhyme or reason, but wanted to share in case this helps anyone else with reverse engineering the algorithm.