Financial position radically improving and FICO score deteriorating

[Anonymous]

In April 09 my score was 813. In Sept 09 it has decreased to 781, There have been 4 decrements along the way. I now have $0.00 debt of any kind, a lot more $ in the bank, two late-model paid off cars, and own home free and clear. In April, I had mortgages of about $400,000, and 12,000 CC debt. I have a 19 year credit history, no collections, late payments, etc. The latest decrease was the company closed an account that had no balance owed, no activity since 2006. This one was from BENEFICIAL NATIONAL BANK, PO Box 15518, Wilmington, DE, 198505518   •   (302) 478-9056, and I don't even know or recall what that was. I had another decrement from an Office Depot account that I had always paid in full month to month. The balance increased from $0 to $8.55, which percentage-wise is infinite, or undefined (because divide by 0). This just seems so bone-headed I can't comprehend it. Would it help to contact Equifax?

Thanks so much.

Tim

[smallfry]

House paid cars paid more money in the bank. Who is this FICO guy anyway? 

[Anonymous]

This was my first post. It was a serious question. I am retirement age and I have worked hard all my life, like many of you have done. I have also done some modest real estate investing where there was some risk involved. I know very little about FICO scoring. I was hoping someone here could provide some guidance.
Tim

[MarineVietVet]

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@Anonymous wrote:

In April 09 my score was 813. In Sept 09 it has decreased to 781, There have been 4 decrements along the way. I now have $0.00 debt of any kind, a lot more $ in the bank, two late-model paid off cars, and own home free and clear. In April, I had mortgages of about $400,000, and 12,000 CC debt. I have a 19 year credit history, no collections, late payments, etc. The latest decrease was the company closed an account that had no balance owed, no activity since 2006. This one was from BENEFICIAL NATIONAL BANK, PO Box 15518, Wilmington, DE, 198505518   •   (302) 478-9056, and I don't even know or recall what that was. I had another decrement from an Office Depot account that I had always paid in full month to month. The balance increased from $0 to $8.55, which percentage-wise is infinite, or undefined (because divide by 0). This just seems so bone-headed I can't comprehend it. Would it help to contact Equifax?

Thanks so much.

Tim

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House paid cars paid more money in the bank. Who is this FICO guy anyway? 

He was paying you a compliment. We should all have your financial situation. Your FICO is decreasing IMO because you are no longer showing any debt. As backwards as it may seem FICO scoring likes to see some activity. Having zero debt and no activity should be (and is) a very good thing except for FICO. I suggest you use a different CC every few months or put a recurring monthly charge on them (always paying in full each month) and I believe your score will go back up and stay there.

FICO also likes to see a mix of credit; revolving, installment, mortgage. But that mix only counts for 10% of your total score.There are many folks who have high scores with no debt and just a few CC's.

Just my 2 cents.

(myfico)
7/09 TU-742 EQ- 779
8/09 TU-765 EQ- 783

CC interest free as of 8/09
Time can heal all wounds and a low FICO.
"Hello my name is Sandy and I'm a recovering crediholic".

[smallfry]

+1. Timmy you have already achieved the purpose of high FICO scores. How many accounts are listed on your EQ report? Try letting no balances report but use the card in the cycle and pay before the statement closing date. Some high achievers do better with no balances reporting but you might need to show some activity. Congrats. You made the team so the strike out with the bases loaded in a spring training game is meaningless. FICO is a risk score and since you already have all the credit you are going to apply for a slight decrease in score is utterly meaningless.

[marty56]

IMHO the $8.55,balance did it.,  I loose 12 points on TU for a small balance reporting.  Since FICO rounds up for util, $1 reports as 1% which is enough to lower my score on TU.

[creditwherecreditisdue]

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@Anonymous wrote:

In April 09 my score was 813. In Sept 09 it has decreased to 781, There have been 4 decrements along the way. I now have $0.00 debt of any kind, a lot more $ in the bank, two late-model paid off cars, and own home free and clear. In April, I had mortgages of about $400,000, and 12,000 CC debt. I have a 19 year credit history, no collections, late payments, etc. The latest decrease was the company closed an account that had no balance owed, no activity since 2006. This one was from BENEFICIAL NATIONAL BANK, PO Box 15518, Wilmington, DE, 198505518   •   (302) 478-9056, and I don't even know or recall what that was. I had another decrement from an Office Depot account that I had always paid in full month to month. The balance increased from $0 to $8.55, which percentage-wise is infinite, or undefined (because divide by 0). This just seems so bone-headed I can't comprehend it. Would it help to contact Equifax?

Thanks so much.

Tim

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About what?

You are a FICO High Achiever. Anything over 760 is considered a high achiever. Fluctuations above that level are of academic interest, but have no practical import. If you have a 760+ FICO and a high income to go with it you can have pretty much anything you want credit wise. Be Happy!

[jackg]

I agree with "marinevietvet" 100%. You have a terrific score and no debt. FICO scores are a predictor of future credit behavior but in your case there is little credit history for them to judge from. Personally I wouldn't worry about it but if it bothers you then apply for a credit card.

[Anonymous]

Hello all,

   I have two credit cards, both of which report to the credit bureaus the CURRENT status of the account on the Statement Closing Date of each month. Now, I have two choices. I can PAY IN FULL each month, but then a $0 balance will be reported, OR I can carry over a small balance, but then I will pay interest. That infuriates me as interest is wasted money. I actually had a conversation with Craig Watts from FICO a couple of years ago, and he told me that an account with a $0 balance will eventually be disregared by the scoring formula if the balance stays at $0.

And then I hear both Suze and Liz make statements like "You don't have to pay interest to get a good credit score, or something like that".

Any input?

Thank you,

John

[jackg]

How much interest do you think you would be charged to carry a balance due equal to 3% of your CL?