Blogger
Posts: 3,360
Registered: ‎10-19-2012
Re: Guess the cause of my score drop

sphinx313 wrote:

Well I don't know how it happened but I just hope you're going to be awake to provide the answer.


Indeed. Here it is:

 



As I’ve hinted at, my 56 points drop was the result of a string of events that just happen to have occurred at the same time. There are 3 major events, mainly just 2. One of my accounts reported a new balance, and one of my new accounts started reporting after the first statement. Normally these events would happen days apart, but due to an apparent Score Watch error, they resulted in a single alert, and therefore a single score change.Cat Frustrated

 

I did max out on one card, the card with a new balance. Smiley Embarassed 

 

This is because the card is a BofA-issued Visa Signature, which doesn’t report the credit limit but does report the high balance. Robot Mad For FICO scoring purposes, the high balance is treated as the credit limit. I’ve been in the process of building up the high balance for this card, so when BofA reported the new balance, which was also the high balance, utilization on the card was 100%. I bet this cost me quite a few points. Overall utilization was hurt, too, but not by that much. My previous utilization was around 25%. I don’t think 40% is that much different. Smiley Indifferent

 

The last time I added a new account, I suffered a penalty of merely 15 points. My score is lower now, so the penalty should be less severe, right? Cat Wink However, the Score Watch alert includes the following:

 

"This score decrease may be caused by this new reason:

  • You have not established a long revolving credit history. "

 Robot surprised

 

With the new card added, my AAoA fell to below 5 months. I had just finished an app spree, but this new account apparently brought the AAoA down to the range that FICO considers a short revolving credit history. It looks like the critical point is at 5 months or so. The penalty for falling below this must be severe, way higher than the 15 points I had lost due to another new account. Cat Frustrated

Established Contributor
Posts: 2,112
Registered: ‎09-25-2011
Re: Guess the cause of my score drop

new accounts + high spending =P that's all you had to say lol


total credit limits $108,400 Credit scores Ex 728 EQ 738 TU 758
Blogger
Posts: 3,360
Registered: ‎10-19-2012
Re: Guess the cause of my score drop

distantarray wrote:

new accounts + high spending =P that's all you had to say lol


 

As I explained, just one new account added and a small increase in utilization ratio alone will not cause that big a score drop. There have to be pretty special circumstances. Smiley Happy

Contributor
Posts: 322
Registered: ‎10-19-2012
Re: Guess the cause of my score drop

HiLine wrote:

distantarray wrote:

new accounts + high spending =P that's all you had to say lol


 

As I explained, just one new account added and a small increase in utilization ratio alone will not cause that big a score drop. There have to be pretty special circumstances. Smiley Happy


are you trying to say your special? Smiley Happy

AMEX Platinum, AMEX Blue cash (10k), AMEX Delta (10k), US Bank Premier Line (14.5k), US Bank Cash + (7.5k), Chase Freedom (5k), Fred Meyer Rewards Visa (7.5k), US Bank Flex Perks Travel Rewards (5k), Discover IT (9.5k), Chase Sapphire Preferred (8k), Alerus Financial Visa Signature issued by Elan (10k), BofA Cash Rewards (10k), Citi Thankyou Pref (6.5k) TU FICO Score = 807, EQ FICO Score = 780, EX FICO Score = 780,
CreditKarma score = 785, CreditSesame score = 773, Vantage = 903
Established Contributor
Posts: 2,112
Registered: ‎09-25-2011
Re: Guess the cause of my score drop

HiLine wrote:

distantarray wrote:

new accounts + high spending =P that's all you had to say lol


 

As I explained, just one new account added and a small increase in utilization ratio alone will not cause that big a score drop. There have to be pretty special circumstances. Smiley Happy


tell that to my credit scores Smiley Very Happy

 

app spree + 30k in charges this month


total credit limits $108,400 Credit scores Ex 728 EQ 738 TU 758
Moderator Emeritus
Posts: 12,926
Registered: ‎12-30-2011
Re: Guess the cause of my score drop
[ Edited ]

HiLine wrote:
With the new card added, my AAoA fell to below 5 months. I had just finished an app spree, but this new account apparently brought the AAoA down to the range that FICO considers a short revolving credit history. It looks like the critical point is at 5 months or so. The penalty for falling below this must be severe, way higher than the 15 points I had lost due to another new account. Cat Frustrated

In the FICO algorithm, if your AAoA is less than a year, it's automatically calculated at a year is our understanding of it.   At least that's the way the report data is presented from various sources.

 

Really with the way it rounds down, until your AAoA >= 2 years, it's stuck at the bottom for that part of the metric, so anything under that is a wash.

 

Edit: also not sure on that short-revolving history tag, that may be as a result of new accounts rather than AAoA.  

 

Starting Score: EQ 04 561, TU 98 567, EX 98 599 (12/30/11)
Current Score: EQ 04 700, TU 04 731, EX 98 725 (05/24/15)
Goal Score: 700 on EQ 04 (01/01/16)


Take the myFICO Fitness Challenge
Valued Contributor
Posts: 1,228
Registered: ‎05-10-2012
Re: Guess the cause of my score drop

Sounds like you have a handle on it, so really not a huge deal.  Thin files tend to swing drastically.  It sounds like the high balance/reported UTIL is temporary and for the best long term.

 

Good luck, I'm sure you'll get a similarly positive swing next month too!

  • Current: EQ FICO 706, TU FICO 701, EX FICO 706 | Starting Score: 525 (05/2012)
  • Starting total revolving credit: $1100 | Current total revolving credit: $36,700
  • Inquiries (12 Months): EQ 2 TU 1 EX 1 | Most Recent: 1/21/2014
Chase Freedom $9500
DCU Visa $10000
Capital One QS $2000
AMEX BCE $3000
Lowe's CC $8500
WalMart CC $3100
BOA Platinum $600
AMEX Gold NPSL
Blogger
Posts: 3,360
Registered: ‎10-19-2012
Re: Guess the cause of my score drop
[ Edited ]

RonDawg wrote:

HiLine wrote:

distantarray wrote:

new accounts + high spending =P that's all you had to say lol


 

As I explained, just one new account added and a small increase in utilization ratio alone will not cause that big a score drop. There have to be pretty special circumstances. Smiley Happy


are you trying to say your special? Smiley Happy


I guess having a Score Watch issue makes me kind of special Cat Tongue

 


Jutz wrote:

Sounds like you have a handle on it, so really not a huge deal.  Thin files tend to swing drastically.  It sounds like the high balance/reported UTIL is temporary and for the best long term.

 

Good luck, I'm sure you'll get a similarly positive swing next month too!


Thanks! I'm still building up the high balance on my Visa Signature though, so until I reach 5k or so and pay it all off, my score will not improve much just yet. Smiley Happy

 


Revelate wrote:

HiLine wrote:
With the new card added, my AAoA fell to below 5 months. I had just finished an app spree, but this new account apparently brought the AAoA down to the range that FICO considers a short revolving credit history. It looks like the critical point is at 5 months or so. The penalty for falling below this must be severe, way higher than the 15 points I had lost due to another new account. Cat Frustrated

In the FICO algorithm, if your AAoA is less than a year, it's automatically calculated at a year is our understanding of it.   At least that's the way the report data is presented from various sources.

 

Really with the way it rounds down, until your AAoA >= 2 years, it's stuck at the bottom for that part of the metric, so anything under that is a wash.

 

Edit: also not sure on that short-revolving history tag, that may be as a result of new accounts rather than AAoA.  

 


It could be. Can anyone who's been through an app spree confirm this? Cat Very Happy

Valued Member
Posts: 26
Registered: ‎09-17-2012
Re: Guess the cause of my score drop

Darn...I was really hoping for a really good story like you bought some land on Mars, or bought a Moon from Saturn or something like that...UGGGGHHH!!! lol well best of luck to you friend.

Blogger
Posts: 3,360
Registered: ‎10-19-2012
Re: Guess the cause of my score drop
[ Edited ]

CadillacMack wrote:

Darn...I was really hoping for a really good story like you bought some land on Mars, or bought a Moon from Saturn or something like that...UGGGGHHH!!! lol well best of luck to you friend.


This is my real story:

 


Mustangfrank wrote:

Your EX reported you to the IRS because you were having an affair with her sister (or brother) 

She/He tells the IRS you were laundering money through your credit cards !

 

Oh Wait......that was me :-(

 


 Smiley Wink