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CLT118
Posts: 2
Registered: ‎09-27-2007
0

at a crossroad, trying to make a come back......

I'm new to this forum and trying to understand how I lost 70 points in 8 months.

Situation: I moved from the West coast to the East, selling a house with a mortgage, and building a house with a mortgage. For a period of 5 months I was carrying 2 mortgages and an equity line of credit with no problems due to decent savings until the West house sold. At the same time I was actively using my airline points collecting cards for purchases for the new house and anything to get points, then paying off the cards in full each month. I thought I was enhancing my credit score by the paying off every month. It seems the credit scoring only captured the high balances each month.

Now I'm in the process of securing a mortgage for an investment property and when I ran my credit report, I had lost 70 points. I have no late payments and I paid off most usage in full each month. So now I have a choice of further reducing savings and paying off in full 2 cards with a total of 18k (all others are at zero balances), or holding onto the money for more reserves and paying off by end of year. The question is how best to increase the scores steadily, use some of my zero balance cards and stay under 9-10% utilization, then pay off each month; or leave them at zero and just payoff the 2 at 18k by end of year, or both?
Senior Contributor
Noah_Bodie
Posts: 4,635
Registered: ‎03-11-2007
0

Re: at a crossroad, trying to make a come back......

How are you checking your reports?
From where did you pull your scores?
On your reports, are CLs reporting on your CCs?

Valued Member
OBXFrank
Posts: 113
Registered: ‎09-03-2007
0

Re: at a crossroad, trying to make a come back......

On the cards carrying the $18K, what are the limits?  I lost a lot of points because, while most of my cards carry around 5-10% at any given time, I have one carrying $6K on a $6500 limit, which is just killing my score (I'm guessing because FICO considers 95% uti on any one card maxed, and it takes my overal usage up, as well).
Outer Banks Frank

"Success is nothing but luck...Just ask any failure!
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Epic Contributor
haulingthescoreup
Posts: 28,098
Registered: ‎04-01-2007
0

Re: at a crossroad, trying to make a come back......


CLT118 wrote:
I'm new to this forum and trying to understand how I lost 70 points in 8 months.

Situation: I moved from the West coast to the East, selling a house with a mortgage, and building a house with a mortgage. For a period of 5 months I was carrying 2 mortgages and an equity line of credit with no problems due to decent savings until the West house sold. At the same time I was actively using my airline points collecting cards for purchases for the new house and anything to get points, then paying off the cards in full each month. I thought I was enhancing my credit score by the paying off every month. It seems the credit scoring only captured the high balances each month.


At what point in the billing cycle were you paying off your balances? With many cards, but certainly not all, your balance is reported to the CRA's (credit bureaus) on the date that your statement drops. If you don't pay off your card until after that date, you are having a high balance report, which is hurting your util (% utilization: amount owed divided by credit limit.)

If that is what happened, go online to each account and pay it to under 10% or even under 5% about 5 days before your next statement is due. Do this for each card for 30-31 days, or until all have posted, and then pull your scores again. You should see a big improvement, again IF this is what was happening before. If you have more than 6 cards, only let half (some say 3-4 max) report a balance and PIF (pay in full) the rest.

If you have access to credit reports that show the actual day of the month that each creditor reports, compare that to your statements to see if they report on the statement date. Also, you can call each CCC (credit card company) and ask when they report. If they say that they don't know, work your way up the supervisor chain. I promise you, someone there DOES know.! :smileywink:

Did you pull (= pay $$$) for FICO scores, or are you looking at scores directly from the credit bureaus or credit monitoring services? EQ sells FICO scores --don't know if they also have home-grown --and the other agencies and credit monitoring services invent their own scores, called FAKO's around here. Most lenders use FICO's, so it's worth at least a one-time investment to see how they view you. Be sure to Google FICO discount code or FICO discount coupon, or call myFICO customer service, and they will give you a 10% off code.

If you have other stuff going on in your credit reports, you'll need to deal with that as well. Good luck!
* 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 Visitor
CLT118
Posts: 2
Registered: ‎09-27-2007
0

Re: at a crossroad, trying to make a come back......

Thanks to you and all the responders above I have some new tools to go out and tackle getting my score started back up. Although the holidays are a challenging time to be so disciplined. It has already went up a few points since I posted my question, now to keep on that path. I appreciate all the feedback! Cheers-
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Epic Contributor
haulingthescoreup
Posts: 28,098
Registered: ‎04-01-2007
0

Re: at a crossroad, trying to make a come back......

Glad to hear back from you, and that you're getting some results!

FICO has posted a 25% discount code (it's on their home page) -- HOLIDAY25. You'll have to use it once everything cycles through. Let us know how it works out!
* 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

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