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I'm using the myFico Scorewatch and the past week things have changed pretty quickly.
My score dropped by 11 points on 3/10 from an inquiry and then dropped another 14 points on 3/14 because my BCP just showed up on my file.
I"m a little frustrated that the smallest of changes have taken my score from 740 to 715 in a week, that's crazy. I feel like I have no idea how to better my score if I can't even understand why I lost so many points over what seem to be small things.
To make matters worse it shows my new amex as having a balance of $75 (which is the AF which amex so kindly charged at the last minute before the bill cut) and no amount for the limit (which is 1k) so it shows as 100% utilized.
So my questions are:
A) Is the inquiry really the reason for the 11 point drop? I thought it was supposed to only cause up a 5 point drop?
B) Why would my Amex show up with no limit amount, that seems odd. The actual claim for my score going down when the card posted was "Too many cards with balances".
Thank you in advace for your help, you guys provide a lot of great advice and fico guidance.
For all situations of this type, there may be issues with reporting lags.
Given this, along with the information you provided, it's hard for another person to say whether it's just a new inquiry or account that is hurting you.
Beyond this consideration, it needs to be said that there's not a magic point value that is deducted for a new inquiry or account. It depends heavily on your situation.
For example, I have a relatively thick file and good scores, and I lost around 10 points for my last inquiry + new account. For someone in a different situation, the impact may be greater.
If you search this forum for terms like "buckets" and "score cards", you can get an idea of how FICO scoring puts people into various groups, and how that drives the scoring of specific events.
Another example of this is that a person with a very high score will get hit really hard if a derogatory shows up.
Those with higher scores are impacted worse for things than those with a lower score. So 11 points for an inquiry would be normal. I have seen those with scores over 740 lose 30 points for an inquiry.
Well thank you , I will definitely look into those, thank you for pointing me in a direction to at least better understand my scoring. I understand that in the end the algorithm is unknown. I just felt a little overwhelmed that I was doing good and then before I knew it my score fell all those points.
When I have gotten my score from creditors it is usually ~ 30 points below the myFico so I have been working to get it in the high 700's so that I would not have to worry about the differences I would always be in the mid-700's at worse.
@guiness56 wrote:Those with higher scores are impacted worse for things than those with a lower score. So 11 points for an inquiry would be normal. I have seen those with scores over 740 lose 30 points for an inquiry.
Wow, I would be furious if I lost 30 points for an inquiry. lol
how old is your account history?
some of the conventional wisdom is a bit different with very young (less than 2 year history) accounts. I can tell you, my score rose with a zero balance back in the early days, i didn't experience the 6-month age inquiry score rebound, and the difference between a 3rd and 4th inquiry less than 12 months was 16 points-(this was with a score in the 700-720 range) .
@YahComb wrote:how old is your account history?
some of the conventional wisdom is a bit different with very young (less than 2 year history) accounts. I can tell you, my score rose with a zero balance back in the early days, i didn't experience the 6-month age inquiry score rebound, and the difference between a 3rd and 4th inquiry less than 12 months was 16 points-(this was with a score in the 700-720 range) .
My AAoA is 4 years.
I have also noticed that if you have 0 or a very small amount of inquries over the last year, 1 new inq will cause a lot more damaage than if your report was riddled with inqs. And it certainly affects higher scores more significantly than lower ones.
I wouldn't worry about it though. You will start gaining the points back as the new account ages. Its part of the game.
@DaveSignal wrote:I have also noticed that if you have 0 or a very small amount of inquries over the last year, 1 new inq will cause a lot more damaage than if your report was riddled with inqs. And it certainly affects higher scores more significantly than lower ones.
I wouldn't worry about it though. You will start gaining the points back as the new account ages. Its part of the game.
Thanks. Yeah I saw on another thread that some think that past 4-5 years AAoA the age isn't that important. I'm at 4 years with the new card so I"m glad since that is the hardest thing to change (since you can only wait. lol)
Again thank you guys, I am very grateful for your advice while I am learning the FICO game.
@adozark wrote:
@DaveSignal wrote:I have also noticed that if you have 0 or a very small amount of inquries over the last year, 1 new inq will cause a lot more damaage than if your report was riddled with inqs. And it certainly affects higher scores more significantly than lower ones.
I wouldn't worry about it though. You will start gaining the points back as the new account ages. Its part of the game.
Thanks. Yeah I saw on another thread that some think that past 4-5 years AAoA the age isn't that important. I'm at 4 years with the new card so I"m glad since that is the hardest thing to change (since you can only wait. lol)
Again thank you guys, I am very grateful for your advice while I am learning the FICO game.
There's diminishing returns all over the FICO model: as a result, your first inquiry is a far harsher penalty than your 5th, let alone your 10th or 20th. Works the same way with tax liens at least under the '98 and '04 models from personal anecdotal experience ('08 is a little different as it appears to weight recent history far more heavily), and presumably most other derogatory information as well (collections, lates, etc.).
There's similar break points for AAoA: the most important one is 2 years (as anything underneath that is scored as one year); I've been one of the folks pontificating that 4+ as mostly irrelevant (minor increases beyond that, especially knowing 760 is as good as anyone's score needs to be rationally) but it's probably at 5+ from more recent anecdotal reports I've seen. Anything beyond that will be less of a positive boost, much like additional inquiries are less of a negative one.