Why are my scores doing the opposite of what they should?

[shazam]

OK, I am over 2 years post Chapter 13, and have that and about 8 old negatives from that on my file, so my scores have been hovering around the mid 600's. I have three credit cards, which I have had since I started rebuilding. I always pay them off in full. 

Card 1 has a $2750 limit

Card 2 has a $4000 limit

Card 3 had a $1500 limit for a long time, so I used the online 'increase my limit' tool and was offered a new limit of $4500, which I took because everything I have read indicated that having higher limits is GOOD for your credit scores.

Everything I have read indicates that carrying $0 balances is good for your scores too.

So explain this: Last month, I didn't get my balance zeroed out before it hit the statement. I still paid it in full before it was due of course, but it hit my report that I owed $370 on my $4000 limit card, and my Equifax credit score INCREASED some points (I don't recall exactly, but 6-8 pts). This month, it reported a $0 balance again, and my credit score DECREASED 8 points. So they reward me for owing money and penalize me for not using my cards?

The credit line increase dropped my Experian score 20 pts. Ouch. Not sure what it will do to the other two.

No other current negs or changes, only other open account is a student loan in good standing being paid off with no negatives on it. The changes are reported by myfico credit monitoring so I know they are a direct result of the above actions. 

I really makes no sense to me, since what I have read seems to indicate that 0% utilization and higher credit lines would be better for credit scores than having balances and lower credit lines. Obviously I am wrong, but just wondering how it works.

[NRB525]

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@shazam wrote:

OK, I am over 2 years post Chapter 13, and have that and about 8 old negatives from that on my file, so my scores have been hovering around the mid 600's. I have three credit cards, which I have had since I started rebuilding. I always pay them off in full. 

Card 1 has a $2750 limit

Card 2 has a $4000 limit

Card 3 had a $1500 limit for a long time, so I used the online 'increase my limit' tool and was offered a new limit of $4500, which I took because everything I have read indicated that having higher limits is GOOD for your credit scores.

Everything I have read indicates that carrying $0 balances is good for your scores too.

So explain this: Last month, I didn't get my balance zeroed out before it hit the statement. I still paid it in full before it was due of course, but it hit my report that I owed $370 on my $4000 limit card, and my Equifax credit score INCREASED some points (I don't recall exactly, but 6-8 pts). This month, it reported a $0 balance again, and my credit score DECREASED 8 points. So they reward me for owing money and penalize me for not using my cards?

The credit line increase dropped my Experian score 20 pts. Ouch. Not sure what it will do to the other two.

No other current negs or changes, only other open account is a student loan in good standing being paid off with no negatives on it. The changes are reported by myfico credit monitoring so I know they are a direct result of the above actions. 

I really makes no sense to me, since what I have read seems to indicate that 0% utilization and higher credit lines would be better for credit scores than having balances and lower credit lines. Obviously I am wrong, but just wondering how it works.

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How long have you had the MyFICO monitoring?

For the EX 20 point drop, what was the day of the last score change, and what else was reported on any of the bureaus between that day and the day of the 20 point drop?

With so many negatives in your file, it may be that they are overall skewing the calculations. Very hard to tell if there are such negatives in the history.

Is your trend in scores increasing over several months? I think there is a noise factor in the calculations, some may have more noise than others, but if your trend is up, that may be what you want to watch until those negatives are resolved.

And for all those negatives, there are no dispute letters or temporary blocks on their effect? Others have had such dispute letters which, if removed, allow the baddie to come out of hiding and influence the score again.

[redbeard]

Actually, carrying less than a 10% balance on a single card will get you a higher score than $0 balances on all cards.  This is the bump you saw.

The credit line increase causing a drop is probably an anomaly.  Likely something else happened at the same time that didn't trigger an alert, so the score change was shown on the next alert that they sent.  Not all changes to your credit cause MyFico to send you an alert or to update your score.

Dan

[shazam]

I've have MyFico since the Bankruptcy, so this is nothing new. I also noticed it last fall when I had a small balance hit the report then drop the next month. 

My score has increased since the BK discharge, but has been hovering around the 650-660 ish mark for some time since nothing has changed. It was nearly 700 before the Fico scoring change, that made it drop nearly 60 pts. But I was back up to 667 and now down to 647 which hurts.

I can't think of any other changes going on. I upgraded to the MyFico 3 bureau in late February and everything on my report was as it should be.

It just seems screwy. I am not applying for new credit any time soon, so it's not a huge issue, but it's annoying.