Understanding FICO® Scoring

[tiger67]

God I hate FICO.

In the last 3 weeks,in order to refinance by home at a better rate, I paid down my revolving accounts $2700, from 46% to 33%, 3 accounts of 11 reporting balances. My score went from 680 to 698 with only half of the balance paydown reporting. I was expecting my score to hit 710 this week.

But then I received an alert today and my score had fallen to 679! WTH!!! The only thing I can find in my reports is my oldest account is now 11 years old. No other changes.

How long should I expect to recover these points?

[tiger67]

bump

[llecs]

I don't know the answer tiger, but the same happened to me. My last 90 day late was removed and my score dropped 17 points. To make things easier, I pulled on 2/28 and again the next day on 3/1 and after seeing that late drop. The reports were easy to compare. After 1 full month, my score is still the same.

[Shnapple]

If I were you, I would look over your credit limits. Maybe after paying down your balances you either got a credit limit decrease, or maybe a credit card closed?

[tiger67]

I monitor the reports daily and there are no other changes. The oldest account aged from 10y-11m to 11y. I am assumming this shifted me into another bucket. Really crappy timing. This will cost me an extra 0.4 percent interest on my mortgage refi I had planned for the end of the month. It also sucks to pay down $2700 and end up loosing 1 point.

The really interesting thing is the simulator. A week ago the EQ FICO simulator projected the following: 

if revolving paid down to 1%,  790-810

if revolving paid down 90% - 100% over 24mo, 810-840

Now: 

if revolving paid down to 1%, 709-749

if revolving paid down 90% - 100% over 24mo, 749-789

So it would appear that my ceiling has been lowered by this change.

[llecs]

What are the factors the helped and hurt your score before the change and what are the factors after the change?

[tiger67]

Sat. I received a SW alert that said my score had changed due to the following:

 -You have recent late payment

 -You have been recently searching for credit

 -You have a new account

What's funny is:

 -1 late payment (30d) in last 7 years, 28 months ago

 -Last inquiry Oct 08

 -New account established Oct 08 

I'll post helping and hurting from ScorePower in a moment. Equifax's system is down once again.

[haulingthescoreup]

I wish Equifax and FICO wouldn't even include these "possible reasons" with their alerts. They are worse than useless, because they are generally irrelevant or completely incorrect. I once got one that said that a score drop might be due to a new late. Thought I'd have a stroke.

Once Equifax gets some extra hamsters back on the exercise wheel powering its servers, let us know what the report says.

[tiger67]

Okay, I guess they finally fed the hamsters.

Hurting: 

Seeking credit (5 in 12m, 3 in 10/08, 2 in 07/08)

High credit usage (36%)

Missed payments (1, 28m, ago)

New account (1, 10/08, only new account in 3yrs)

Helping:

No serious delinquency

Long account history

From summary:

Amount of Debt - Good

Payment History - Very Good

Amount of New Credit - Good

Length of Credit History -Good

Message Edited by tiger67 on 04-07-2009 04:52 AM

[haulingthescoreup]

Looks like it's your util (well, and sort of your inqs.) Here's what I have on my EQ:

Hurting:
Serious delinquency (I have a 90-day late)
Bad payment history (3 different accounts with lates)
Short account history (short AAoA --4 years)

Helping:
Low credit usage --0% (I usually have one account reporting, this was a hiccup)
Bills paid on time recently (most recent late 33 months ago)
Recent credit card use

You're in the same or better shape on just about everything other than your util. Anything you can do to get it down will help. It looks like when you got re-bucketed into an older history bucket, if that's what happened, you wound up having much higher util compared to your new peers. My guess, anyway.

That long history bucket is brutal on util and inqs!


eta:
From summary:
Amount of Debt - Good
Payment History - Very Good
Amount of New Credit - Very Good
Length of Credit History -Good

Message Edited by haulingthescoreup on 04-07-2009 03:31 PM