Help w/FICO score...confused

[Anonymous]

I am still new around here so my apologies if I posted this in the wrong section.

I am confused and need advice or to be educated more on credit scoring...This morning I received an alert that MF score for TU decreased from 640 to 630. There are no new alerts. My credit utilization is lowered from 17% last month to 6%. No new negatives for 2 years and 9 months. Payments paid on time. I've been rebuilding since BK discharge on 2/1/7. 

Can anyone explain to me why I my score would decrease 10 pts when nothing has changed? Any suggestions on what I can do to increase score? 

New credit accounts since 3/29/17...total credit $1,850.

3/29/17...CapOne Platinum: $300 limit...current reported bal. $17

4/22/17...Kohl's Charge: $300 limit...current reported bal. $54

5/7/17...Overstock: $1000 limit...current reported bal. $42

5/5/17...VS Pink Card: $250 limit...current reported bal. $25

Other accts:

4/1/17--CapOne Auto: $26,667, paid on time & extra towards the principle. 

[SouthJamaica]

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@Anonymous wrote:

I am still new around here so my apologies if I posted this in the wrong section.

I am confused and need advice or to be educated more on credit scoring...This morning I received an alert that MF score for TU decreased from 640 to 630. There are no new alerts. My credit utilization is lowered from 17% last month to 6%. No new negatives for 2 years and 9 months. Payments paid on time. I've been rebuilding since BK discharge on 2/1/7. 

Can anyone explain to me why I my score would decrease 10 pts when nothing has changed?

The MyFICO Alerts don't tell you why the score changed. And you don't know that "nothing has changed". You would need to compare the report for that bureau just before the score change and the report just after the change to know what's different. Sometimes  the mere passage of time can trigger a change, such as, e.g., the average age of accounts moving up another notch in terms of years.

Any suggestions on what I can do to increase score? 

New credit accounts since 3/29/17...total credit $1,850.

3/29/17...CapOne Platinum: $300 limit...current reported bal. $17

4/22/17...Kohl's Charge: $300 limit...current reported bal. $54

5/7/17...Overstock: $1000 limit...current reported bal. $42

5/5/17...VS Pink Card: $250 limit...current reported bal. $25

Other accts:

4/1/17--CapOne Auto: $26,667, paid on time & extra towards the principle. 

Yes your best bet would be to stop applying for new credit. Your score will go up as your average age of accounts, age of newest account, and age of oldest account get larger, and your number of recent inquiries goes down.

And of course pay your credit cards super fast, even before the statement date in some cases, letting 3 of the accounts report a zero balance while the other reports a small balance of 5 to 10% of the limit.

And pay off your car loan as fast as possible, but not to zero.

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[Anonymous]

Thank you for the information and advice. The phone rep at TransUnion was not helpful at all.

I wasn't planning on applying for any new credit for awhile. My goal card is Discover so plan on waiting until I have more payments reporting and until my score are 680-700.

What about being added as an authorized user? Will the age of my most recent account start back at 0? By adding me my credit limit would be over $2,500 and my husband thinks it could help increase my credit score.

I am also still waiting to see what comes of my goodwill letters to clean up old late pays and errors. Any day now 12 of my Navient loans will be paid and consolidated to the one account. Hoping that helps and doesn't hurt my score.

[Anonymous]

Here are some (but not all) reasons why your FICO score may drop:

• New accounts made your AAoA drop from one tier to another, for example dropping from 4 years AAoA to 3 or 2 years AAoA dings you.  As your new accounts age together this ding will reduce over time.
• Even if your overall utilization (aggregate) dropped, high utilization posting on one or more accounts can ding you.  So if your overall utilization goes from 20-10%, that's great, but if one card went from 30-90%, that hurts.
• Age of newest account can ding you.
• If you used to only have a balance on one or two accounts but now have balances on 3 or 4 accounts, you can get a ding.  To maximize FICO, you only want ONE account reporting a balance and the rest zero.  The account that reports a balance should be OVER zero but no higher than 8.9%.  Learn when your cards reports a balance and then play the pay-off game so that all report $0 except for the one account showing $5 or $10.
• A new installment loan can help FICO but you will start seeing a better boost when it's not reporting 100% balance due.  Even 95% or 99% can help your FICO score.  New installment accounts will help more once they aren't reporting 100% left to be owed.
• In rare occasions, changing from one "scorecard" bucket to another can ding you but it's temporary.  There is no easy way to know what internal scorecard bucket you are in.

[SouthJamaica]

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@Anonymous wrote:
Thank you for the information and advice. The phone rep at TransUnion was not helpful at all.

I wasn't planning on applying for any new credit for awhile. My goal card is Discover so plan on waiting until I have more payments reporting and until my score are 680-700.

What about being added as an authorized user? Will the age of my most recent account start back at 0? By adding me my credit limit would be over $2,500 and my husband thinks it could help increase my credit score.

I am also still waiting to see what comes of my goodwill letters to clean up old late pays and errors. Any day now 12 of my Navient loans will be paid and consolidated to the one account. Hoping that helps and doesn't hurt my score.

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Frequently being added as an authorized user, where the cardholder has excellent scores, will help boost your score.

[Anonymous]

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@Anonymous wrote:

What about being added as an authorized user? Will the age of my most recent account start back at 0? By adding me my credit limit would be over $2,500 and my husband thinks it could help increase my credit score.

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Increasing your credit limits has no effect by itself on your FICO score.  In other words, suppose you have two guys with identical profiles in all respects except size of credit limit.  They each have four cards with a balance of $150 on two cards and $0 on the other two.  One guy has a $1000 credit limit on each card and the other guy has a $20,000 credit limit on each card.  The two guys will have exact the same score.  The bigger credit limits don't help the other guy at all.

What does matter is reported CC utilization, but you can keep that very low even with a tiny credit limit.

Where the AU could help you is with a factor called Age of Oldest Account.  (And to a much smaller extent with a factor called Average Age of Accounts.)  It all depends on how that CC issuer reports the "Date Opened" of your AU account.  Many issuers will report a card that is 20 years old as a 20 year old card even for the AU account.  Others will report the AU account as if it were just opened. 

So what I would do is the following.  See if you can find someone with an account that:

      (1) Is at least six years older than your oldest account (10, 15, or 20 years older would be best, but six will help).

      (2) Has a balance that is regularly $0 or extremely low

      (3) Has no derogs associated with it (lates, etc.)

If you can find a card like that, go to the Credit Card forum and ask them if they know how that issuer handles AUs.  Does it report the Date Opened as very recent (the date it was added as an AU) or very old (the date the card was actually opened by the true account holder)?

If you get a green light from all of those, then go ahead and add it.

[Anonymous]

It looks like you just added 2 accts this month, or last month, May.   

I did the same thing, 2 store cards, and TU dropped my score a few points,  HOWEVER....  Experian LOVES it when you get new cards so just wait for that to kick in.   

I suspect your loss of 10 points is from the new cards finally catching up and reporting.    

You also need to pay off some of those cards,  just your Victoria Secret card is reporting at 10% untilization.   Keep it below 9% on one card,  the others at ZERO when they report.   Reporting happens at the end of the cycle, each card is different.   

[Anonymous]

Thank you so much for the information. You've answered a lot of questions I had and it makes sense to me. And you answered my exact AU questions I wanted to know. 

I have paid the full balances to $0 on Overstock, Victoria Secrets, last week. Victoria Secrets still reported with the balance 2 days later. I do and plan to pay the other 2 in full as well this week, and will only use and pay down CapOne (before the statement cuts) to $3-5 for the rest of this month. 

After opening Victoria Secrets with the SCT I instantly regretted it. If I could close it without it affecting my credit I would. I've actually only used it twice to buy gifts for others at Bath & Body. The advice these credit monitoring services have given me are stirring me in the wrong direction apparently, such as, "try to obtain a credit limit ovr $2500...," or something of that nature.

[Anonymous]

If you have at least 3 other credit card accounts, go ahead and close VS -- it will report positively for 10 more years and not hurt you one bit.

That is, unless you rely on the TL to help with utilization overall.

[JustBPatient]

And just in case it wasn't mentioned.  You can use the heck out of your cards all month BUT you need to know when the card cuts (statement closes and reports).  That will be the total they report to the bureaus.  So as long as they are at zero when they report you will get a bump as you go too.  Remember to let at least 1 card report per month.  Good luck!!