Reply
New Visitor
Taustex76
Posts: 1
Registered: ‎02-06-2008

Why did my score go down?

Hi, this maybe a dumb question for most of you but I'm confused.

My score went down according to myFICO because a credit card I have which has been dormant for four months now has a balance.

This credit card is used just for emergency. Hence why it hasn't been used for four months.

To avoid my score going down each time I use this card should I have used it periodically and just ensure there isn't a balanced carried over each month to avoid finance charges or would it have been best not to have used this card at all ?

Thank You.
Established Contributor
AWLEGZ
Posts: 762
Registered: ‎10-23-2007

Re: Why did my score go down?

yes you can try that--your score went down b/c your total utlization ratio changed--if you use it and pay in full before the next statement reports it may avoid the decrease as well
 
also if depends on the amount used based on the limit--if your UTI went from 1-9 percent or from 10 percent or higher
 
FICO likes to see balances on cards between 1-9 percent if more than that is used I am sure the affect is much greater than higher the balance--as you pay off or down you will get the increase back I am sure it was short term
I want to join the 700 club one day I am getting there :smileywink:
FICOS 12/17/07 EQ-597 EX-651 and TU-651
FICOS 01/18/07 EQ-594 EX-651 and TU-662 FICOS
04/21/2008 TU-680 EQ-613 EX-688
Moderator Emeritus
llecs
Posts: 32,880
Registered: ‎08-04-2007

Re: Why did my score go down?

Welcome to these forums!
 
I can think of three possible reasons:
 
1) In very rare cases, and certainly for periods exceeding 4 months, some folks here have had a dormant cards cancelled and automatically reactivated thereby affecting aging.
 
2) If this is your only card, and let's say you have a $1000 CL and you use it for, let's say $700, your utilization jumped from 0% to 70% overnight and could very negatively impact your scores. It can be easily remedied by paying down as low as possible.
 
3) Maybe there is something else on your reports that affted your scores.
 
Use it every 2-3 months and buy something simple like a cup of coffee. For card purposes, some CCCs like you to PIF while others perfer you to carry a balance. Score-wise...some are posting better results if $5 or so is left on the card each month. I prefer to PIF myself.
Moderator Emerita
Community Leader
Epic Contributor
haulingthescoreup
Posts: 28,114
Registered: ‎04-01-2007

Re: Why did my score go down?

I had a card that I hadn't used in 4 or 5 months, and when I blew the dust off of it, I had a small score drop due to using a previously inactive account, or some such jargon. In my case, it didn't affect my util, and it hadn't been cancelled, it was just like a mini-penalty for a new account. The score went right back up the next month.
* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
New Member
psychojr
Posts: 7
Registered: ‎04-30-2007

Re: Why did my score go down?

[ Edited ]
The FICO scores go up and down dramatically because the scoring people are morons.  Here is a quiz.  Who has the lower score, assuming allthings are equal:
 
1.  Person 1 makes $300,000 per year, has credit card with $50,000 line and a $40,000 average balance on the statement, but the balance is paid in full each month.  Person 2 has no other debt.
 
2.  Person 2 makes $20,000 per year, has a credit card with $20,000 line and a $10,000 balance.  The minimum payment is made each month and he has a mortgage balance of $50,000.
 
Assuming equal credit history lengths and payment histories, Person 1 most likely has the lower score.  The credit scorers DO NOT take into account whether you pay off your credit card each month.
 
I'm similar to person 1 and get nailed on a card I use for business.  It has a $40k limit and I run about $1,000,000 through it each year for the points.   The system stinks. 


Message Edited by psychojr on 02-06-2008 01:07 PM
Moderator Emeritus
ByrdMan
Posts: 7,975
Registered: ‎12-19-2007

Re: Why did my score go down?



psychojr wrote:
The FICO scores go up and down dramatically because the scoring people are morons.  Here is a quiz.  Who has the lower score, assumi9ng allthings are equal:
 
1. 



My vote is for 1.
___________________________________________________________________
Do what is true in spite of the consequences--your future is only as true as you are.
Moderator Emeritus
llecs
Posts: 32,880
Registered: ‎08-04-2007

Re: Why did my score go down?

[ Edited ]


psychojr wrote:
The FICO scores go up and down dramatically because the scoring people are morons.  Here is a quiz.  Who has the lower score, assuming allthings are equal:
 
1.  Person 1 makes $300,000 per year, has credit card with $50,000 line and a $40,000 average balance on the statement, but the balance is paid in full each month.  Person 2 has no other debt.
 
2.  Person 2 makes $20,000 per year, has a credit card with $20,000 line and a $10,000 balance.  The minimum payment is made each month and he has a mortgage balance of $50,000.
 
Assuming equal credit history lengths and payment histories, Person 1 most likely has the lower score.  The credit scorers DO NOT take into account whether you pay off your credit card each month.
 
I'm similar to person 1 and get nailed on a card I use for business.  It has a $40k limit and I run about $1,000,000 through it each year for the points.   The system stinks. 


Message Edited by psychojr on 02-06-2008 01:07 PM

FICO doesn't take into account your income or mortgage balance or credit usage history, so as long as it is not negative (lates).
 
Each CCC reports to each CRA on a fixed day each month. You could easily PIF each and still show utilization of up to $50k in your example. You need to figure out what day your CC reports. It is not always related to your due date. I now PIF not based on my due date but rather the date the CC reports (minus a couple days). I don't use the card then until it reports, then I will use it again up the following month/reporting day.
 
Edit: FICO also doesn't care how large your credit lines are.
 


Message Edited by llecs on 02-06-2008 04:24 PM
Moderator Emeritus
ByrdMan
Posts: 7,975
Registered: ‎12-19-2007

Re: Why did my score go down?



psychojr wrote:
The FICO scores go up and down dramatically because the scoring people are morons.  Here is a quiz.  Who has the lower score, assuming allthings are equal:
 
1.  Person 1 makes $300,000 per year, has credit card with $50,000 line and a $40,000 average balance on the statement, but the balance is paid in full each month.  Person 2 has no other debt.
 
2.  Person 2 makes $20,000 per year, has a credit card with $20,000 line and a $10,000 balance.  The minimum payment is made each month and he has a mortgage balance of $50,000.
 
Assuming equal credit history lengths and payment histories, Person 1 most likely has the lower score.  The credit scorers DO NOT take into account whether you pay off your credit card each month.
 
I'm similar to person 1 and get nailed on a card I use for business.  It has a $40k limit and I run about $1,000,000 through it each year for the points.   The system stinks. 


Message Edited by psychojr on 02-06-2008 01:07 PM


My vote is still for 1, for all the reasons that llecs said. There is a "game" to be played and the smart people on this forum have figured out much of it. Read to learn how to play the game, get your rewards, and get your score at the same time (if in fact you need the score right now). If you don't need to app for anything, to heck with the game.

Llecs, congrats on changing colors.
___________________________________________________________________
Do what is true in spite of the consequences--your future is only as true as you are.
Moderator Emeritus
cheddar
Posts: 6,794
Registered: ‎09-29-2007

Re: Why did my score go down?



llecs wrote:

Edit: FICO also doesn't care how large your credit lines are.
 
Mostly true, but not entirely.
 
There is a certain point, I believe it's around $25K or $30K CL on a single CC, where that CC stops counting as revolving.
 
Somebody back me up on this?  I can't remember the details exactly.

 
----------------------------
App free since 7/11/08.
TU 744 / EX 710 / EQ 694 (Starting to slip. :smileysurprised: )
Moderator Emeritus
ByrdMan
Posts: 7,975
Registered: ‎12-19-2007

Re: Why did my score go down?



cheddar wrote:


llecs wrote:

Edit: FICO also doesn't care how large your credit lines are.
 
Mostly true, but not entirely.
 
There is a certain point, I believe it's around $25K or $30K CL on a single CC, where that CC stops counting as revolving.
 
Somebody back me up on this?  I can't remember the details exactly.

 



Cheddar, I know that HELOCs count as installment at around $50M. I hadn't heard that CCs do that. I just looked at an old CR. My $25M CC is revolving. Maybe someone else can weigh in on this.
___________________________________________________________________
Do what is true in spite of the consequences--your future is only as true as you are.

myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.

>> About myFICO
FICO Score - The Score that matters
Click to Verify - This site chose VeriSign SSL for secure e-commerce and confidential communications.
Fair Isaac Corporation is a BBB Accredited Financial Service in San Rafael, CA
FOLLOW US Social Media Facebook Twitter Pinterest Google+