Has the criteria for calculating FICO scores changed recently?

[Anonymous]

I understand that the method for calculating the score is a trade secret.  but has that calculation changed? 

This question stems from the fact that since December when my credit score was 702, my score dropped to 683 in March.  The reason given for the change was that my debt ratio was too high.  This does not make any sence to me, because I only made two purchases during this time frame.

1. ~$120 ring for my fiance (for our wedding)
2. ~$2100 for new appliances to replace broken ones in the house.

the only other change I made at this time was a new credit card to consolidate 3 other cards that were charging over 26% apr onto a new on at only 14%.  that balance is just over $3000.

I have less than 6000 in debt (not counting student loan and mortgage)  but an open available credit spending of over 30,000 how can my debt to available credit be too high?  it's only ~5% ?? 

It seems to me that the general consumer is getting a double, if not triple wammy. 

1. first our cost rise (food, gas, general cost of living)
2. the value of our home decreases
3. even though mortage rate also decrease we can't refi because we owe more than the home is worth
4. and because PMI was required for purchase and the home is currently under water, PMI will still have to be carried until loan is 20% below current market value
5. -in question- is now our FICO scores changing causing our scores to go down without negative actions on our part?????

Please help me figure this out, and any suggestions to help boost my score would be much apprechiated.

Mrs. M.

[road2freedom]

The dip is most likely attributed to the new card you opened to consolidate the other three cards. The purchase probably had an effect, but a much smaller one than the inquiry based on your balances. Also, did you keep those other cards open or close them?

Yes, consumers take it on the chin every time we don't pay cash for something. 

[MarineVietVet]

Hello and welcome to myFICO.

May I ask you where you bought your score and it is Equifax, Transunion, or Experian? That might seem like a strange question but there are only a few places left where you can buy actual FICO scores. Most sites will sell you a "credit score" but it is based on non FICO scoring formulas and can't be compared to a FICO score in any fashion.

You wrote that you have $6,000 in debt and $30,000 in available credit. Is all that revolving debt? The utilization that is calculated and shown on a report is always based on revolving credit. Installment loan utilization is factored but is such a small part of the formula as to be virtually nonexistent.

If those 2 numbers are both revolving debt then your utilization is actually 20% (6,000/30,000) and that's pretty high. FICO High Achievers (760+ score) average about 7% utilization.

I also agree that your new credit would likely drop your score a little because of a new inquiry, new credit reporting, and a lowering of your AAoA (Average Age of Accounts).

From a BK years ago to:
EX - 3/11 pulled by lender- 835, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

[longclimbback]

I found that you get penalized if you have more than 1 card showing a balance.So if your new card shows a balance of 3000 and you have 3000 more scattered out on another card or 2 try to get the 6000 all on 1 card.My score and my wife's will go up or down 20-30 points depending on 1 or 2 cards showing balances and slight changes in the total utilization %.

[Anonymous]

Ahhh!!

This reminds me why I hate numbers.

to answer your questions  I have been a member of MyFICO since 10/2009 I have been watching my Equifax number, through myFICO,  stedaly grow till this past december when it hit 702, then it fell to 683 in march (with steps down along the way).

I had my numbers reversed I divided 30,000/6,000 and got 5.  but thats what I get for doing math at all, knowing I am dyslexic and numbers give me trouble. 

yes that 6,000 is all revolving debt.  I did not include my school loan or my mortage in that number.

I did not close the cards because even though the rates were high, the age was also fairly high.  I thought that closing them would be worse than not closing them.  but I do not use them.

[MarineVietVet]

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@Anonymous wrote:

Ahhh!!

This reminds me why I hate numbers.

to answer your questions  I have been a member of MyFICO since 10/2009 I have been watching my Equifax number, through myFICO,  stedaly grow till this past december when it hit 702, then it fell to 683 in march (with steps down along the way).

I had my numbers reversed I divided 30,000/6,000 and got 5.  but thats what I get for doing math at all, knowing I am dyslexic and numbers give me trouble. 

yes that 6,000 is all revolving debt.  I did not include my school loan or my mortage in that number.

I did not close the cards because even though the rates were high, the age was also fairly high.  I thought that closing them would be worse than not closing them.  but I do not use them.

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Just keep working on paying down those revolving balances. As they go down so will your utilization and that in turn should help your score. Even more important IMO (In My Opinion) is that the faster you pay them off the faster you'll stop having to pay interest on those balances.

From a BK years ago to:
EX - 3/11 pulled by lender- 835, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".