Understanding FICO® Scoring

[lexus4me]

My credit score dropped from 751 to 733 when I accepted a credit line increase on one of my credit cards from $6500 to $8000.  The account has a zero balance.  This makes no sense to me whatsoever.  I only use 2 of my 8 credit cards, and I pay the balance off each month , so I am not carrying any credit card debt.  This just seems extreme.

I had a $5000 balance on a credit card last year, and I paid it off all in one payment.  It took 30 days for the Creditor to report the payment to the Credit Bureau.  If you make a charge on an account that you hadn't used in a while, it gets reported immediately.

There seems to be some imbalance in the reporting structure.

[Brammy]

 I doubt the inquiry alone caused that big of a drop.  The largest I've ever heard of was 7 points.  It could be the new avail credit when yyou're not really using the credit you have.  FICO likes to see activity because that not oly shows that you can get credit but can handle it responsibly.

I have two cards that I consider active, one has a BT which I pay just as any installment loan to get it paid off before the promo rate expire, the other is at 0 % and I use it daily for everyday expenses.  No sense it PIF every month since I'm not paying interest and getting 2% cash back but I do put the funds in a savings program so I can pay it off before the BT expires.  The other cards I use occasionally until they decide to make it worth my while to carry in my wallet

[lexus4me]

Myfico monitor reported the change in my score and the reason given was 'you recently requested or have been seeking new credit'...I was not seeking any other credit and only accepted the 'credit increase offer' from the screen on my account for that particular card.

[Brammy]

---

lexus4me wrote:

Myfico monitor reported the change in my score and the reason given was 'you recently requested or have been seeking new credit'...I was not seeking any other credit and only accepted the 'credit increase offer' from the screen on my account for that particular card.

---

It takes many inquires in rapid succession to cause that type of drop.  Your lender probably ran a hard instead of a soft inq.  I hate it when they do that especiall when they are making the offer.  Check your inquiries and if you did not authorize a ard, call and ask them to remove it or dispute it if its anywhere but Experian

[lexus4me]

There is only one Inquiry reported on my Credit report, and it is from that bank.  And, yes, it was a hard inquiry, but I have had hard inquiries in the past, like shopping for a mortgage, and that didn't even drop it 8 points.  That was why I posted this note...it seemed really extreme.  In fact, the last credit inquiry on my report was for that Mortgage shopping I did in May of 2006 when I bought my current house.

[Brammy]

---

lexus4me wrote:

There is only one Inquiry reported on my Credit report, and it is from that bank.  And, yes, it was a hard inquiry, but I have had hard inquiries in the past, like shopping for a mortgage, and that didn't even drop it 8 points.  That was why I posted this note...it seemed really extreme.  In fact, the last credit inquiry on my report was for that Mortgage shopping I did in May of 2006 when I bought my current house.

---

I'll admit that I've never seen this either.  Did you pay off an installment or close an account.?  That is truly wierd.

[lexus4me]

I haven't done anything else.  In fact, my score had just gone up to 751 in Nov 2006 when I paid off that $5k credit card balance on another bank card.  I had no other activity at all since then until I responded to this 'credit increase offer'.  LOL, it's great to get punished for accepting credit increase offers for being such a 'good customer'.  The card was my Chase card.

[antredd67]

Wow...I guess your score dropping is a lesson for all of us.  Sounds like because your accounts didn't have anything on them, and the fact that if you dont use those accounts, from what Brammy and others have said on this forum, those accounts become inactive and changing your uti.  I strongly bet that what happened was when your chase card did the inquiry and approved the credit line increase, your available credit went up...thus showing that you have more of a chance of going in debt.

For me there was a hard copy run on my Discover card for a credit line increase, and it didnt' affect my Fico score even though I was shopping mort rates with 4 other lenders that same month.  Maybe it counted as part of me shopping mortgage rates but I was sure that I would have been dinged for having that hard inquiry on my report.

How long  have your 6 other credit cards been at 0 balances.  I am sure that if they are inactive and you are just using your two cards, that was why your are dinged.  Fico is looking at how you are now managing your two cards as opposed to your 6 others which would be considered inactive now if you haven't put anything on them for at least 3 months or within the quarter.  What a low blow but your ding has allowed me to see why its important to have the smallest number of cards with very high credit limits so that I won't be dinged or punished for trying to manage credit well.

Message Edited by antredd67 on 04-17-2007 03:42 PM