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myFICO Score decreased?!?! Confused...

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GBBangi
Member

myFICO Score decreased?!?! Confused...

So my FICO credit score last month was 697, and I got an alert today (17FEB2014) saying my credit score decreased down to 685.

I did apply for a credit card limit increase from $12,000 to $18,000, but only  received an increase to $14,000, so I can see why that could decrease my score a little bit. However, this last month I also decreased my credit card balance by $1504, which went from $5,069 to $3,565 on my Credit Report.

 

I know for credit scoring guidelines that payment history is 35%, amount owed is 30%, Length of credit history is 15%, new credit is 10%, and type of credit is 10%. I'm just so confused as to why my FICO score would drop by 12 points, which I think is a lot, because I only have 1 credit card right now through Navy Federal, which has a new increased limit of $14,000 and revolving credit balance about between 25-30%. I'm making about $36,000 (after taxes) right now, and I've never missed a payment on anything. I'm just going to guess Navy Federal did a hard pull of my credit report from the limit increase request.

Message 1 of 6
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user5387
Valued Contributor

Re: myFICO Score decreased?!?! Confused...

Assuming that it's a FICO score from the same source each time, I would guess one of the following:

 

1.  Hard pull for CLI.

 

2.  Report updating lags causing utilization issues.

 

3.  Some sort of rebucketing.

 

Message 2 of 6
GBBangi
Member

Re: myFICO Score decreased?!?! Confused...

Also, I had an auto loan with PNC bank that I refinanced with Navy Federal. Navy Federal has no refinancing fees, but I'm not sure if refinancing through them would affect my credit score somehow.

Message 3 of 6
user5387
Valued Contributor

Re: myFICO Score decreased?!?! Confused...

I don't know what a refinance looks like in terms of the mechanics.

 

However, if it involves closing out one account (installment loan), and adding another, your AAoA will go down, which could cause a score hit.

 

Message 4 of 6
Revelate
Moderator Emeritus

Re: myFICO Score decreased?!?! Confused...


@user5387 wrote:

I don't know what a refinance looks like in terms of the mechanics.

 

However, if it involves closing out one account (installment loan), and adding another, your AAoA will go down, which could cause a score hit.

 


That's all it is: Inquiry for new loan application, approval, Navy writes a check to the original lender; original lender marks tradeline as paid in full and $0 balance; Navy reports new tradeline.

 

Inquiry and new tradeline penalties, closure of old installment loan.

 

@OP: refinancing a car can create a short-term ding to one's FICO Score; however, this is a case where if it makes financial sense to do so (large APR or payment reduction) should absolutely take it.  Money > credit report end of the day, credit damage will recover especially something temporary like an inquiry and new tradeline issues, whereas money once spent is gone.

 




        
Message 5 of 6
GFer
Valued Contributor

Re: myFICO Score decreased?!?! Confused...

+1 Relevate knows....



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