My FICO Score through Washington Mutual dropped 20 points!!!

[Anonymous]

Hi everyone, I really don't understand what's happening, I am a new immigrant in the US. The first credit card I got was 3.5 years ago, I have been in the country for 5 years. So obviously through my car loan, and the four major credit cards I have I managed to build my credit history, but it takes a very long time. I finally reach 670 just a couple of weeks ago, and all of a sudden I receive an email from Washington Mutual who offer FICO score when you log in to your account, the email said that my fico score dropped 20 points!!! When I logged in to see why, here is what they said: Why Is My Score 649? 1. The length of time your accounts have been established is relatively short This factor is based on the age of the accounts on your credit bureau report (the age of the oldest account, the average age of accounts, or both). Research shows that consumers with longer credit histories have better repayment risk than those with shorter credit histories. Also, consumers who frequently open new accounts have greater repayment risk than those who don't. 2. The amount owed on your revolving/charge accounts is too high The score measures how much you owe on the revolving/charge accounts (Visa, MasterCard, Discover, American Express, Diners Club, department store cards, etc.) that are listed on your credit bureau report. (For credit cards, the total outstanding balance on your last statement is generally the amount that will show in your credit bureau report. Note that even if you pay off your credit cards in full each and every month, your credit bureau report may show the last statement balance on those accounts.) Source: Fair Isaac Now, I don't think this is true, because I just finished the last payment on my car, and to include all my credit card balance is around $10,000. If I call Fair Isaac or I request to see my credit score (I think I may have to buy it) will they give me the exact reasons? I refuse to open another credit card, but if it will increase my score I may have to, I saw on Suze Orman that opening another credit card might help your credit score not hurt it, please advice....

[Anonymous]

When you paid off your car loan you lost the credit mix which is probably why you lost the points.

Focus on paying down your Debt to Credit Ratio and your points will go up faster. 

Don't open up another credit card this will decrease your average age of accounts which will make you lose points and you will lose points for the new inquiry.

[haulingthescoreup]

Hi, springcharm, welcome to the forums!

The score that you get from WaMu is what we call a PFICO, the "P" probably standing for Providian, which WaMu bought out several years ago.

A PFICO is what is known as a bank-card-enhanced score. In other words, it comes from a slightly different formula than that of your so-called "classic" FICO score that you get here. It weighs factors that are believed to predict CC behavior more heavily, and gives less weight to other factors. In addition, the score that you get toward the end of one month is actually the previous month's score. So your most recent score is actually from March. And finally, it is on a different score range, from 250 - 900.

So while it is not a FAKO, it is also not the same thing as the TU FICO that you get here. From message #2, it looks like maybe your util (utilization) last month went over a certain percentage point. It's not the total dollar amount owed on your credit cards (although actually, $10K is quite a lot!) It's the percentage of credit used out of your total credit limits.

Calculate your total util by adding up all the balances that report on your statements, adding up all your credit limits, and dividing the total balances due by your total credit lines. The best util is under 10%.

There are certain points in your util at which your score will either increase or drop; for instance, 10%, 30% and 50%. (There are others, but these are "for instance" change points.) If your util just went from 29% to 31%, your score would have dropped.

And it's the amount that reports on your statements, not the amount left after you make your payment.

Paying the car loan might have contributed as well, as scores are helped by having an open installment account. I'm just going with the messages that you got on the e-mail alert.

[Anonymous]

Dear Moderator Haulingthescoreup, I think I just discovered the cause of this drop in my FICO score besides paying my car loan: It's because I used one credit card ONLY while my mom was visiting, so my utilization on that credit card went from $1500 to $4000. Believe me I know what you are saying about $10,000 credit card debt is a lot, but every person has their own circumstances, and certainly starting from zero in a new country on your own with two kids, and no dual income, can definitely do it. At first, all this credit card debt brought me in to depression as I have never ever dealt with debt overseas. I a very optimistic now that I will hopefully pay it before my son graduates to go to college in two years thanks so much. I will keep on reading an educating myself regarding this.

[haulingthescoreup]

Sorry, I didn't mean to sound critical! My apologies.

Yes, that's what it sounds like. One card with a high balance can do an astonishing amount of damage.

Thank goodness it's temporary. Your score will recover when the balance goes back down. Good luck!

[Anonymous]

Wamu uses a different kind of FICO score called PFICO just for credit cards. My Wamu PFICO score just dropped nearly -70 points. There was no indication why it dropped. For many months my score was just going up up up. My Classic FICO is about the highest it has ever been and still going up and my Wamu score is dropping. Even if it is 30, 60, 90, 120 days behind there was no reason for this drop. PFICO factors different stuff than Classic FICO. I'm betting that it is a temp drop for your payoff and you will get it back soon in a month or two. I sure hope my -70 something comes back up next month. Can't figure out the drop at all. Well your not alone. Right now I am working on learning what it takes to hit the perfect Classic FICO (mortgage) score. After I complete my education on Classic I might jump to PFICO (card enhanced) score. But they are different score models and they are both FICO scores.

Message Edited by ilovepizza on 04-28-2008 09:12 PM

[Anonymous]

Hey ILOVEPIZZA, Thanks to you and everyone for the boost of confidence you have given me. As much as I disguise these FICO and PFICO scores, I certainly do believe there is a light at the end of the tunnel. When I arrived to the US, I promised myself that I will not be a slave for these credit cards companies, and I still believe I am not. I am focusing on paying off one credit card at a time, and paying a little bit only over the minimum for the others. Please let me know what links I have to read to understand more about the FICO score vs PFICO score. Just as Martin Luther King said, "I HAVE A DREAM", and my dream is to PAY OFF MY CREDIT CARDS, and then use them and pay them off, but never leave a balance!!! Have a great day everyone...

[Anonymous]

There is very little about PFICO that I know of. One thing I think is a big difference between the two is large payoffs on revolving debt. Classic rewards you right away. I *think* PFICO gets worried. But if you just run a small charge and PIF next month to wipe out the large payoff (last payment) on CR score probably rebound. I don't know much more about it, just learned it existed recently. The only reason I think large payoffs might be something that can lower a score is because thats when I get hit for CLDs and shut down by creditor problems. Thinking it is related also because PFICO dropped. But it was the first time I got to test it and honestly can't say for sure. This just makes the most sense based on my limited understanding of PFICO. On the other hand Classic FICO I know well. Classic is simple. Keep debt low, very low. Have a mix of credit and always pay on time. You are graded by the credit you have so if you don't have many accounts you might need to apply to get them. But that's about it for Classic with the exception of average age.

[BetterTomorrow]

My score dropped 100 points in WAMU report but went up in myFico so you aren't alone.

[Anonymous]

mine dropped 30 pts.. maybe because i used 7% util instead of 4.  LOL  I have no idea.  Hopefully it will go back up next month.. HSBC gave me a whopping 400 cli.