Utilization Up – Credit Score Down

[Anonymous]

Just received MyFico monitoring alert that Experian reported a balance change.  Made a mistake and did not PIF, therefore, increased by NFCU GoRewards cc by $272.  My EX score took a 7 points dive, is this the norm?  Don’t now my utilization percentage exactly at this time but last reported with my 3B reports in January, my utilization was at 8%.

[expatCanuck]

7 points is high, but understandable if you exceeded the 8.9% util threshold, particularly if you have a thin file and/or added another card that's reporting a non-zero balance.

[HeavenOhio]

I concur with expatCanuck. There's a good chance that you passed 8.9% or possibly added another card with a non-zero balance.

There's no need to panic. Just bring you balance down next month. In the meantime, do a post-mortem. Check out the details for last month, this month, and next month. That'll teach you a little about how your profile reacts to balance changes. Armed with this information, in the future, you'll be able to avoid the ding. Or if you need to report a higher balance than usual, you'll know what kind of ding to expect.

[Anonymous]

OP, how many total cards do you have?

If you have just 1 card and your reported balance caused you to cross the 8.9% threshold, that would not only be your single card utilization but also your aggregate utilization.  Typically a cross at this point would result in a 15-20 point drop IMO, not just 7 points.  For that reason, I'm thinking you have more than just this 1 card, but it would be cool if you could clarify this.

Second, it's important to understand that alerts you receive are not always tied to score changes.  Yes, you'll receive alerts of reported balance changes.  At those times, you'll be provided with a fresh score.  The score change you see though may or may not have anything to do with the balance change.  There are people that will receive an alert that they paid off a credit card and their score is down 70 points.  They wrongly assume that paying off that credit card resulted in their 70 point drop, but that's an impossibility.  It just means that whatever caused that massive score drop wasn't an alertable event.  Hopefully that makes sense.