score difference for one card

[Schumy]

hello,

my wife is an authorized user on my card. we pulled our scores and noticed her score drop by 45 points once my balance posted to her credit report. the same balance posted, of course, to my report and my score stayed the same (actually it rose by 8 points). two questions from this - 1) why would her credit score drop if we both have the same credit limit on one card (and the util rate on this card was less than 25%), and 2) how rapid do scores change? i always pay my cc's in full each month, however, something tells me we will not see the 45 point increase in one month.

thanks for the insight,

bill

[llecs]

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@Schumy wrote:

hello,

my wife is an authorized user on my card. we pulled our scores and noticed her score drop by 45 points once my balance posted to her credit report. the same balance posted, of course, to my report and my score stayed the same (actually it rose by 8 points). two questions from this - 1) why would her credit score drop if we both have the same credit limit on one card (and the util rate on this card was less than 25%), and 2) how rapid do scores change? i always pay my cc's in full each month, however, something tells me we will not see the 45 point increase in one month.

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1) She could possibly see a score drop if:

a) the age of this CC is younger on average to the rest of her history (aka average age of accounts or AAoA). Lowering that average can result in a score drop for some. Depends how far that average drops.

b) the age of this CC is a year or less. Everything aside, most on here see a drop of 15-20-25 for a newly added CC. FICO dings you for new accounts. This won't apply if the account is over a year (generally) and doesn't apply if the AU account was backdated to the original open date beyond a year (the AU's open date is the same as the org. open date on the CC). 

c) the account has any late reporting, or any negative comment.

d) the CC is over the limit or maxed out. Even if you pay it in full monthly, your CC will only report the balance you had on the statement date. So if paid in full prior to the open date, it could be used again maxing out the account come statement date and that can impact your credit.

e) the CC has a utilization that increased her overall CC util resulting in a score drop.

and f (not applicable to her I'd assume)....mix of credit comes into play. So, it might be indifferent on hers if she already has CCs, but you can see a net gain if any of the above hurt and was washed out by the positive impact due to an improved mix.

2) Scores can change daily. This CC could possibly change your/her CR once per month when it reports the statement balance about 2-3-4-5 days following the statement date. YMMV on the CC, but generally that's how it works. If the drop is caused by d or e, then that's easily fixable by adjusting your payment/spending habits. 

And for certain you are looking at FICO scores? If so, are they from the exact same source (e.g. myFICO.com)?

[Schumy]

1) She could possibly see a score drop if:

a) the age of this CC is younger on average to the rest of her history (aka average age of accounts or AAoA). Lowering that average can result in a score drop for some. Depends how far that average drops.

perhaps. but she has been AA on my account for three years. 

b) the age of this CC is a year or less. Everything aside, most on here see a drop of 15-20-25 for a newly added CC. FICO dings you for new accounts. This won't apply if the account is over a year (generally) and doesn't apply if the AU account was backdated to the original open date beyond a year (the AU's open date is the same as the org. open date on the CC). 

nope. again, at least three years.

c) the account has any late reporting, or any negative comment.

none. never.

d) the CC is over the limit or maxed out. Even if you pay it in full monthly, your CC will only report the balance you had on the statement date. So if paid in full prior to the open date, it could be used again maxing out the account come statement date and that can impact your credit.

never. only at 25% util.

e) the CC has a utilization that increased her overall CC util resulting in a score drop.

perhaps. her only other cc has a limit of 7k. mine is at 20k, however, i cnnot see this as negative.

and f (not applicable to her I'd assume)....mix of credit comes into play. So, it might be indifferent on hers if she already has CCs, but you can see a net gain if any of the above hurt and was washed out by the positive impact due to an improved mix.

again, not sure how this could be negative if we are only talking about mine. she used maybe $200 of her 7k limit, always paid in full.

2) Scores can change daily. This CC could possibly change your/her CR once per month when it reports the statement balance about 2-3-4-5 days following the statement date. YMMV on the CC, but generally that's how it works. If the drop is caused by d or e, then that's easily fixable by adjusting your payment/spending habits. 

And for certain you are looking at FICO scores? If so, are they from the exact same source (e.g. myFICO.com)?

yup. TU was 746 with the same info as equifax at 790. 

any further thoughts?

[llecs]

For clarity, are you saying this account had already been reporting to her CRs for the last 3 yrs? If so, ignore 50% of what I typed.

If not new, what is her before overall utilization and what is her after overall util? You'd have to do some math. Since you pulled a myFICO report, it'll sometimes show that percentage on pages 2 or 3 of her report.

The limits don't matter. It's how you use those limits that count.

Even if you PIF a CC, it can still report a high balance if you had a high balance. CCs will report the balance you had on the statement date, and doesn't always reflect a payment in full. For example, let's say the due date is 9/4. The statement is 9/8. If you PIF by 9/4 you now have a balance of $0 on the due date. But after the payment clears you use the card again or make some big purchases, that high balance will reflect on the statement and that's the balance that will report.

Was this a dormant CC? Prior to this last statement, when was the last time it was used?

I see you posted TU 746 and EQ 790. I assume these aren't the new scores unless her FICO was at 835 for EQ. Do you know the before and after FICO change on each?

[Schumy]

the card was not new to her, reporting for the last three years. further, the card is used monthly. i do not know the before and after FICO scores once the statement posted.

as far as paying goes, i sort of understand what you are saying. let's say payment due date is 25th. if i carry a balance of $5k, pay the balance on 23rd, and do not use the card until new payment cycle, my reported balance is $0? however, if i carry a balance of $5k, pay the balance on 23rd, and then reuse the card for $1k, then my balance is reported as $6k? this is more curiosity than anything.

further, having answered all questions, i still have no idea why her score would drop so much.

thanks for the help.

[llecs]

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@Schumy wrote:

i do not know the before and after FICO scores once the statement posted.

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I was assuming that you (or she) pulled her FICO between two statements resulting in two differntly reporting balances and that's why you were posting about the score change. How do you know her score changed? I ask because the FICO report does show other indicators that can point to a score change if this CC wasn't it.

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Right, if you have a due date of the 25th, PIF on the 23rd, don't use the card again or get hit with any interest, the balance reporting will be $0 provided the card isn't used again until the following statement date.

If you have a due date of the 25th, pay the balance to $0 by that due date, but use $1000 before the next statement, the balance showing on your CRs will be $1000. In some rare cases, I had payments that didn't post right away and that's resulted in my payment not being credited and a higher balance showing, but I pay electronically and the payemtn most always clears a day or two following the date I initiate the payment.