getting worse ... hopefully before getting better ??

[expatCanuck]

It doesn't seem that there's any rhyme or reason to the CRA scoring.

EQ 718 a month ago.  Then a mortgage refi and HELOC switch (closing one, opening another).

Today's EQ is 699 -- notwithstanding that I've since paid over 75% of my (formerly maxed) CC balances

(2 of 3 down to $0), and the utilization of our HELOC has dropped from 78% to 65%. 

The rationale -- a new account (the HELOC).

Yet our mortgage is now cheaper, we're close to $1k/month better off cash flow wise

(now that we're out from that crushing CC debt), and we owe several $K less in actual

total debt.

So why the falling FICO?

<sigh>

Message Edited by expatCanuck on 02-05-2010 05:33 PM

[LIGHTNIN]

Sorry you have had no replies,   I dont know the answer.

You may have to ask a MOD to move your post over

to the Understanding FICO Scoring.....I would think you have better results that way.

I hope you can find your answers on the other board 

[llecs]

Sorry about the score drop. There could be many factors in play. First off, and I'm sure you did this already, make sure you got your EQ score from myFICO, your lender, or from Equifax.com. There's quite a few here who get their scores from other places and realize they don't have a FICO score.

Adding a new account, like a HELOC, will often drop your score due to the new account, possible inquiry, and to the impact on AAoA if impacted. Damage from these is temporary and any loss would rebound within a year.

Now any loss can be offset with improvements on utilization. HELOCs are typically scored like CCs. What was your overall utilization before the HELOC and debt paydown and what was it after adding the HELOC? Be sure to include the balance and limit of your HELOC on the latter calculation.

[Anonymous]

you have improved your personal situation for your family, FICO can go fly a kite! Eventually those score will creep back up, a FICO point loss IMO is worth improving one's financial situation anyday...

[expatCanuck]

> Now any loss can be offset with improvements on utilization. HELOCs are typically scored like CCs.

> What was your overall utilization before the HELOC and debt paydown and what was it after adding the HELOC?

> Be sure to include the balance and limit of your HELOC on the latter calculation.

Well, I've added two new accounts, so AAoA (I'm assuming that means Avg. Age of Acc'ts) will surely take a hit.

As for util, if my (well, Excel's) math is correct, the utilization before the refi was at a very ugly 83.5% (95% CCs, 80% HELOC).

Now it's a just plain nasty 55%.  (65% HELOC, 9.5% CC).  Total raw debt is down almost $10K.

All to the good, one would think.

Message Edited by expatCanuck on 02-12-2010 11:13 PM

[expatCanuck]

> you have improved your personal situation for your family, FICO can go fly a kite! ... 

> a FICO point loss IMO is worth improving one's financial situation anyday...

Agreed.  But I would like to see my scores above 720 so that I can refi the car loan. ...

As I write this, I'm still waiting for the paydowns to kick in

(with TU 699 & EQ 719 as I type (EQ sees one of the three paydowns, TU sees none of them))

Message Edited by expatCanuck on 02-12-2010 11:10 PM

[llecs]

---

expatCanuck wrote:

> Now any loss can be offset with improvements on utilization. HELOCs are typically scored like CCs.

> What was your overall utilization before the HELOC and debt paydown and what was it after adding the HELOC?

> Be sure to include the balance and limit of your HELOC on the latter calculation.

Well, I've added two new accounts, so AAoA (I'm assuming that means Avg. Age of Acc'ts) will surely take a hit.

As for util, if my (well, Excel's) math is correct, the utilization before the refi was at a very ugly 83.5% (95% CCs, 80% HELOC).

Now it's a just plain nasty 55%.  (65% HELOC, 9.5% CC).  Total raw debt is down almost $10K.

All to the good, one would think.

Message Edited by expatCanuck on 02-12-2010 11:13 PM

---

Yep, the new accounts will hurt. Last summer, my overall util was a hair less than 20%, just got a 4 yr AAoA, but then added a new Amex, Discover, and a Penfed TL. My scores went from 720-730 to where they are now, 650ish....just for adding 3 new accounts. Expect gradual increases over the next 6-12 months as those new accounts age and you'll see sizable gains when your overall util hit below 30% with most coming when your overall util hits below 20%.

[Anonymous]

Hi

I'm posting to this thread because its title fits my situation - I'm hoping that a recent drop in my score will soon be followed by an increase, and i'm looking for somebody to help me feel secure in that assumption

Basically, my FICO score was 719 up until today. I recently opened a new card with a promotional APR on balance transfers, and transferred about $3k to it from another card. I also took out a $1500 cash advance on another card, using a promotional check with a low APR. Mindful of my credit, I tried to maintain (or even decrease) my debt to credit ratio by paying off about $1500 in debt on cards with higher interest rates.

Nevertheless, today I got notification that my score has gone down to 690, largely due to the increased balances on these two cards. When looking at my report, I see that the old card is still reporting that I owe $3k to them, so it looks as if I just charged a brand new balance on the new card. 

My question is: once the balances get updated and its clear that my overall debt amount has gone down, will my score go back up? Or is a short-term, large balance increase always a negative factor, even if it is accompanied by a similarly-sized short term balance decrease elsewhere?

and feedback would be great. thanks!

[Jazzzy]

Hello, and welcome to the forums.

You are likely right that the drop in score is due to the double $3k debt showing. When this corrects itself during the next reporting cycle, your score should go back up...if you will still be at the same utilization percentage that you were at before the drop.

If using the check didn't increase your utilization, you should be OK. FICO also looks at the number of your accounts with balances, so that may have changed. FICO also looks at balances on individual cards, so if anything is closer to being maxed out, that can be a negative factor as well.

I think you'll be OK.