FICO score decreased

[Anonymous]

Hello,

 

My FICO score went down from 750 to 724 for the reasons:

 

1.       that the outstanding balance in my CC went from $0 to $129 (the $129 is less than 1.3% of my available credit), and

2.      I had one new enquiry in the last 12 months.

 

I called MyFICO customer service and the response was that my revolving credit is only 15 months old, and that I don’t have many accounts: I have one CC; I paid off my car loan in less than 6 months and my home improvement loan in a year.  I do have a home loan.  By the way, my bank in Illinois deals only with Equifax and Transunion.  Only my CC gets reported to all three agencies.   

 

My question is whether the 26 points reduction in credit score is reasonable?  I would appreciate your thoughts.

 

[llecs]

Welcome to the forums! I had moved your post here...you'll get a better response.

When your score went down, was it due to an alert, or did you pull a before and after report to see the change? When was the inquiry? When was the last time you opened a new account or loan?

[Anonymous]

If you only have one CC, you've used all of your available revolving credit accounts, which does count against your Utilization score.

There are four different measures for Utilization, and two of them (together) say that you should have 1-5% balance reported on less than half of your revolving accounts.  With only one card, you can't do both.

Therefore to maximize that portion of your UTIL, you'd have to have at least three credit cards (since less than half of two cards is still zero), and post a small balance on one card.

However, before you apply for more credit, read some of the posts related to building credit when you have recently established it.

[ edited to clear up some of the wording ] 

Message Edited by writemikep on 11-05-2008 09:29 PM

[Anonymous]

724 is an excellent credit score for someone with your length of credit history. 750 is actually something that is very hard to maintain if you don't have a longer credit history.

You may have lost points for no longer having active non-mortgage installment accounts as well. You now have less of a credit mix than when you had both a revolving account and a non-mortgage installment loan.