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Why did my equifax score drop 12 points

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MarineVietVet
Moderator Emeritus

Re: Why did my equifax score drop 12 points


@xiaobao12 wrote:

Hi Marine,

 

Could you please elaborate on why you say "wait for it to post", then pay? I googled around and researched. People said that you should keep your credit utilization to less than 20%. Does that mean, if I have 5 cards, with $2000 limit on each, my total utilization is $10000. So, I should try to keep a balance of $2000 or less across all of them?

 

Btw, I pay off my CCs in full every month.

 

Thanks so much for your time and help.

 

 


Hello and welcome. Goodness you've found a three year old thread.  Smiley Happy

 

Everyone's situation is different and there is no one size fits all approach to this and therefore no "ideal" number but what seems to work well for most people is to have only one of their cards report a small (<9% of it's credit limit) balance each month and then pay in full before the due date. You can use it as much as you want during the month but what's important is the reported balance because for most cards whatever is reported on the monthly statement is what is used to calculate utilization for the month.

You might have to play around with the percentages for a few months to see what works best for you. Some people say that 1-3% utilization helps the most. For others it might be 5-9%. As I said it's not one size fits all.

On any other cards always try and have them report a zero balance each month. That doesn't mean you can't use them just make sure that the desired zero balance on these accounts is achieved several days before their statements post.

Along with individual and overall utilization, FICO also scores the number of all types of accounts reporting a balance.at any one time Making sure less than half of all your accounts report a balance helps most people.

Now this approach really isn't necessary if you're not looking to apply for any credit in the near future or unless you are trying to tweak your score for maximum effect but some folks do this as a hobby just to see how high they can get their score.



Message 11 of 18
pipeguy
Senior Contributor

Re: Why did my equifax score drop 12 points


@MarineVietVet wrote:
snip.....(some important actual informational stuff....
Now this approach really isn't necessary if you're not looking to apply for any credit in the near future or unless you are trying to tweak your score for maximum effect but some folks do this as a hobby just to see how high they can get their score.

 


And exactly who might THAT be Mr. 2550?  Smiley Surprised

Message 12 of 18
Anonymous
Not applicable

Re: Why did my equifax score drop 12 points

MarineVietVet is right.  Zero will make your scores drop.  Try to keep it reporting at least a full 1% to 9% on one card.  I use two. I keep rotating the other.  Hubby uses it for lunch, motorcyle equip, etc.

Message 13 of 18
xiaobao12
New Visitor

Re: Why did my equifax score drop 12 points

Hi Marine,

 

Thanks so much for responding and for the advice.

 

Can you clarify:

 

Along with individual and overall utilization, FICO also scores the number of all types of accounts reporting a balance.at any one time Making sure less than half of all your accounts report a balance helps most people.

 

My score is 792, 763, 793 (Equifax, Experian and TransUnion). 774 is my FICO. 

 

I want to get these up to 800's. Is it possible to do it just using the advice you gave me? I don't have mortage, nor car payments or anything of that sort.

 

Thanks so much.

 

Message 14 of 18
gdale6
Moderator Emeritus

Re: Why did my equifax score drop 12 points


@xiaobao12 wrote:

Hi Marine,

 

Thanks so much for responding and for the advice.

 

Can you clarify:

 

Along with individual and overall utilization, FICO also scores the number of all types of accounts reporting a balance.at any one time Making sure less than half of all your accounts report a balance helps most people.  Scores on the number of revolving accounts reporting a balance too. Personally I wont let more than 25% of mine show a balance and I usually only have 1 reporting a balance.

 

My score is 792, 763, 793 (Equifax, Experian and TransUnion). 774 is my FICO. 

 

I want to get these up to 800's. Is it possible to do it just using the advice you gave me? I don't have mortage, nor car payments or anything of that sort. I can tell you that you dont need a mortgage to obtain an 800 or higher score.

 

Thanks so much.

 


 

Message 15 of 18
MarineVietVet
Moderator Emeritus

Re: Why did my equifax score drop 12 points


@gdale6 wrote:

@xiaobao12 wrote:

Hi Marine,

 

Thanks so much for responding and for the advice.

 

Can you clarify:

 

Along with individual and overall utilization, FICO also scores the number of all types of accounts reporting a balance.at any one time Making sure less than half of all your accounts report a balance helps most people.  Scores on the number of revolving accounts reporting a balance too. Personally I wont let more than 25% of mine show a balance and I usually only have 1 reporting a balance.

 

My score is 792, 763, 793 (Equifax, Experian and TransUnion). 774 is my FICO. 

 

I want to get these up to 800's. Is it possible to do it just using the advice you gave me? I don't have mortage, nor car payments or anything of that sort. I can tell you that you dont need a mortgage to obtain an 800 or higher score.

 

Thanks so much.

 


 


I can't add anything to what gdale posted.

 

You can achieve very high scores with just credit cards.

 

 

Message 16 of 18
xiaobao12
New Visitor

Re: Why did my equifax score drop 12 points

Thank you guys for the replies. I will try out these techniques.

 

You guys have so much knowledge!!!

 

May I ask one more thing - do the banks report the balances when I get an email saying "my statement is ready." So, if my pay by dates are usually the 23rd of each month, I get a statement about 27 days before that. Is that when I have to make sure that I am reporting "0"?

Message 17 of 18
MarineVietVet
Moderator Emeritus

Re: Why did my equifax score drop 12 points


@xiaobao12 wrote:

Thank you guys for the replies. I will try out these techniques.

 

You guys have so much knowledge!!!

 

May I ask one more thing - do the banks report the balances when I get an email saying "my statement is ready." So, if my pay by dates are usually the 23rd of each month, I get a statement about 27 days before that. Is that when I have to make sure that I am reporting "0"?


There are several terms you'll see that all mean the same thing:

 

Statement date

Posting date

Closing date

 

For most credit card accounts the statement date is right around the same time every month give or take a few days. For example my Citi account tells me that the closing date this month will be 4/11. That means whatever balance I might have at the end of that business day is what will be reported to the credit agencies. Knowing that date helps me to manage any payments properly.

 

There are exceptions though. US Bank reports the balance on the last day of the month. You just need to know how your particular creditor reports.

Message 18 of 18
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