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Score dropped - what happened?!

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Anonymous
Not applicable

Score dropped - what happened?!

Two weeks ago I signed up Score Watch and got my first FICO score.  Since then, I have paid off my 3 credit cards, received increases in my credit limits from all 3, and contacted the credit bureaus to update some information.  I had a bankruptcy 6 years ago, but some of the creditors that were included in the bankruptcy had my account listed as bad debt/collections.  All 3 credit unions updated this information to show that the creditors listing me as bad debt/collections were indeed included in the bankruptcy.  One of the credit unions actually deleted the creditors that were listed as bad debt.  I felt really good that I was finally on the right track and anxiously awaiting my first credit alert update.  Well, it came yesterday and my score dropped 13 points!  I don't understand.  Here is what the report said:
Your FICO score has dropped; your interest rate on a new 48 month auto loan may be more expensive.  I do not have a new auto loan.  I purchased a new auto last year in July with a 60 month term and have not changed it.  The report also said:
  • There was a change on your credit report that lowered your score but did not trigger an alert. For example, the balance on an account might have increased enough to lower your score, but not enough to trigger a balance increase alert.  (How could this happen when I paid off all my debts?)
  • You moved from one category of credit users to another as time passed. For example, you may have transitioned from the category "consumers with a new credit history" to the category "consumers with a two- to five-year credit history". As a result, your credit report is evaluated differently, causing a slight change in your score. The good news is that moving between categories like this usually offers you the potential to reach a higher FICO score in the future.
  • I don't understand what any of this means.  I went from a 662 to a 649, not good news when I'm trying to rebuild.  Did contacting the credit unions hurt me?  HELP!

    Message 1 of 8
    7 REPLIES 7
    MM1234
    Regular Contributor

    I think this is a great question. Did you repost in the o...

    I think this is a great question. Did you repost in the other Forum sections? You may get a better reply. I'd like to know. Not sure if this is only a PRODUCT question.

    Did you close your Accounts after paying them? There may be other factors that popped up and maybe another can help.
    Message 2 of 8
    Anonymous
    Not applicable

    Thanks!  I did indeed repost under "Understanding FI...

    Thanks!  I did indeed repost under "Understanding FICO Scoring".  You can view the response I received from Brammy by going to that section.  It's a good one. 
     
    In answer to your question, I did not close my accounts after paying them off as I was advised not to since they were my only established credit other than a car loan since my BK.  My oldest account is from 2003.  Even though 2 are through Cap1 and 1 is from Merrick, at least they were there when I needed someone to let me try again.  Cap1 told me they will cancel my yearly fee when it is time for it to come up again in October if I call to remind them and my account/credit remains in good standing.  All 3 also increased my credit limit, but I think that should have improved my score, not hurt it.
    Message 3 of 8
    Anonymous
    Not applicable

    Re: Thanks! I did indeed repost under "Understanding FI...

    I paid off all my cc once and my score dropped too. I was told to use my cc monthly, even if it's for just a small amount because they need to be able to score you on your payments to create an ongoing history. Also any unusual movements on your part can cause a temporary dip in score.
    Message 4 of 8
    Tuscani
    Moderator Emeritus

    Re: Thanks! I did indeed repost under "Understanding FI...

    Try and always carry a small balance on each card.
    Message 5 of 8
    smallfry
    Senior Contributor

    Re: Thanks! I did indeed repost under "Understanding FI...



    @Anonymous wrote:
    I paid off all my cc once and my score dropped too. I was told to use my cc monthly, even if it's for just a small amount because they need to be able to score you on your payments to create an ongoing history. Also any unusual movements on your part can cause a temporary dip in score.


    Unusual movements? As in don't move or I'll shoot?
    Message 6 of 8
    Anonymous
    Not applicable

    Re: Thanks! I did indeed repost under "Understanding FI...


    @smallfry wrote:

    Unusual movements? As in don't move or I'll shoot?



    And put your credit cards on top of your car where I can see 'em ... Smiley Happy
    Message 7 of 8
    Anonymous
    Not applicable

    Re: Thanks! I did indeed repost under "Understanding FI...

    LOL! U guys are trippin Smiley Very Happy
    Message 8 of 8
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