@Anonymous wrote:
@NRB525 wrote:
@Anonymous wrote:I decrease my debt % from 7% to 0% my score goes down 13pts I raise my % from 0% to 7% and my score goes down 3pts. If FICO has no memory I should have gained the points I lost last month. I just give up.
Hold the phone. OP, your scores went from mid-500s in November to over 700 in two months? And now you are concerned about a drop of 13points?
You need to reset your expectations, my friend. FICO does change, it does recalculate. You got a HUGE run up in score very recently. Now there is a bit more adjustment going on as things get refined.
Chill.
The ONLY reason I went from mid 500's to over 700 in 2 months is becouse of my HARD work. I had 13 colections accounts paid them ALL off with PFD's. My dissiapointment is that on this fourm people always state "FICO has no memory when it comes to uitilization" so if you you have 7% one month 5% next and your score goes down you could bring your uitilization back up to 7% to get the points back that you lost.
Your hard work resulted in a massive positive change in your score, which you should be proud of, that is obvious.
You are now in a new tier of FICO scores, and without the derogatories holding down your score, the utilization factor becomes more noticeable.
When you went from 7% utilization to 0% on your debt, that puts you in the category of "cardholder has no debts to measure", which is why the suggestion is around to report 1% to 9%, not $0. This change from 7% to 0%? That is an example of FICO having no memory, so with 0% reporting, it recalibrated the measures.
Now, when you go from 0% to 7%, having 7% utilization is in the sweet spot, so you get some points, but because FICO has no memory, it starts from 0% and says this cardholder is now borrowing some money, so we'll give points, but we have to see how the payments work out. You can't expect to gain back exactly the same 13 points, that is not what is meant by no memory.
You also have to allow time for the algorithm to get used to any particular configuration you are allowing to report. It has to have time to stabilize and is not an instant adjustment that knows your future intentions. FICO is always backward looking, and does the best it can with the information in your credit file.
The basic scoring principle of Fico as far as utilization has no memory but Fico has buckets and anecdotal evidence shows that someone who has been running high utilization for awhile gets bucketed down to a lower scoring bucket and when the high util is cured a lot of lost points are recovered, not all. It takes awhile at low util before you get re bucketed back up into a higher scoring bucket. In other words you have to show Fico you can maintain that low utiliztion for a period of time,
@Anonymous wrote:
@Anonymous wrote:
@NRB525 wrote:
@Anonymous wrote:I decrease my debt % from 7% to 0% my score goes down 13pts I raise my % from 0% to 7% and my score goes down 3pts. If FICO has no memory I should have gained the points I lost last month. I just give up.
Hold the phone. OP, your scores went from mid-500s in November to over 700 in two months? And now you are concerned about a drop of 13points?
You need to reset your expectations, my friend. FICO does change, it does recalculate. You got a HUGE run up in score very recently. Now there is a bit more adjustment going on as things get refined.
Chill.
The ONLY reason I went from mid 500's to over 700 in 2 months is becouse of my HARD work. I had 13 colections accounts paid them ALL off with PFD's. My dissiapointment is that on this fourm people always state "FICO has no memory when it comes to uitilization" so if you you have 7% one month 5% next and your score goes down you could bring your uitilization back up to 7% to get the points back that you lost.
FICO has no memory when it comes to utilization. If you can freeze time and change utilization, your score would bounce back to the same score when you utilization bounces back. But if you change anything in your credit profile (number of payments made, derogs, number of accounts, number of inquiries, average age of accounts, etc) then the weight any given factor plays on your score could change, and thus the change in your score could change.
What people told you was correct. Utilization has no memory. What you are not understanding is that the weight of any given factor in your FICO score changes as your profile changes (simplified statement summarizing my prior lengthy post).
I think this is incorrect, or at least, it can't happen in one month. What OP did was reset all the loan balances to No Debt Outstanding. Then, OP changed the game by Taking On New Debt From A Zero Balance. That's a form of negative. So OP cannot expect the utilization memory to come back the same as the prior month, because there has been an interruption in the basic "are you borrowing money yes or no" question. It went No, so that changes the baseline the next time it goes Yes.
And, like a lot of OP in this forum, people need to realize that FICO changes rapidly, particularly if one has a short credit history. The only thing that stabilizes FICO is a long history of consistent payments and no missed payments. Any zeroing of open balances, or derogs, can change that sequence and then FICO needs some time to get back on track.
