topic Re: Don't understand at all in Understanding FICO® Scoring

Don't understand at all

Creditweary — Mon, 01 Oct 2007 18:53:56 GMT

I have been watching my credit score for about a month now and I am completely confused on how FICO determines scores, it makes no sense in my situation.

Two weeks ago I had a balance increase on an old credit card account of $55, that is 120 days past due, my FICO dropped 50 points! Last week I had a change in one of my accounts that is current, I paid down $300 of the balance and there was no change on my FICO. That is the only two things that has happened in the last two weeks that has affected by credit report, so how can I drop 50 points for $55 increase, but gain NOTHING for paying down a debt that is current by $300.00? If anyone could help me I would appreciate it. This is frustrating and makes no sense to me.

Re: Don't understand at all

Anonymous — Mon, 01 Oct 2007 19:04:55 GMT

I understand your frustration. When I was new to this board, I was frustrated a LOT! But levels have dropped considerably, as knowledge level increases. Did you get a credit line increase, or did your account balance increase due to charges? Also, be patient when watching activity and/or scores. It usually takes a few days for a CCC to update their accounts before you can get an accurate picture of how much you actually owe. I've learned to ONLY pull a CR once every 60 days. That's the only way I can get a valid pic of what happens from month to month. Monitoring it daily would drive me crazy. Good luck to you

Re: Don't understand at all

haulingthescoreup — Mon, 01 Oct 2007 23:41:06 GMT

Good Lord, Sylvia, you have far more patience than I! If you have some left over, could you loan it to me? And here I was, feeling smug that I went for almost 72 hours without pulling a TC report. But you're right, there can be a maddening lag in score changes.

Creditweary, I'm not at all surprised at a 50-point drop--EQ in particular is death on lates, in my experience. But this would happen on any CRA, since the account was already 4 months' late and now it has a balance increase. Timely payment is 35% of your FICO score--more than a third. And those lates will be with you a good long while. I speak from sad experience. Congrats on the $300 payment on the current card, but I'm sure you know that the next project is getting that late card caught up. Get your plan going, and stick with it, no matter what. good luck!

Re: Don't understand at all

Anonymous — Tue, 02 Oct 2007 12:18:19 GMT

LOLROTF. Me? patience? hauling, that should be patient's! (check me into sleigh center ICU!) Thanks hon. It's tough to be sure. And c.w., hauling's right on. NOTHING is more important than paying your bills on time. That was a tough lesson for me. And my scores prove it. It's soooooooooo hard to get good credit scores and sooooooo easy to loose it in just a matter of a few days....or weeks. I run scared when ever any of my bills are within a week of becoming due. So much so, I have to have a "pay on sight" bill paying policy. Paying on time is THE major credit scoring criteria the CRA's look for.

See hauling? Wordy even when I dont have much to say! giggle

Re: Don't understand at all

RobertEG — Tue, 02 Oct 2007 19:53:48 GMT

120 past due is death. Simple as that.

Wait 7 years.

Re: Don't understand at all

haulingthescoreup — Tue, 02 Oct 2007 21:03:47 GMT

@RobertEG wrote:
120 past due is death. Simple as that.

Wait 7 years.

Yikes, I hope it's not quite that bad. I keep reading that FICO now uses a new scoring algorithm that focuses most tightly on the past 24 months, and then the ding fades. Although you do have to look at your mark of shame for 5 years after that. I've just got one 120, and after March 2008, it will be over 2 years. I'll see if there's a bump them.

Geez, 6 more months, yuck. But I do know that each late = 50 points when it firsts posts. Ouch, ouch, ouch.

Re: Don't understand at all

Anonymous — Tue, 02 Oct 2007 21:35:03 GMT

Ouch hauling! Didn't know that, but it sure makes sense! if that doesn't put motivation in you about paying on time, I don't know what will. Thanks for the info

Re: Don't understand at all

Anonymous — Tue, 02 Oct 2007 22:14:22 GMT

120 late IS death to your scores

It does NOT have to KILL you for 7 years. I have a 120 day in my past. Add to that a couple 60 days and several 30's. BUT.......I have cleaned up my act. The 120 and several 30+'s are from '02, when I suffered through an unemployment and even longer under employment. I have not had ANY lates since early '06.

My scores recenly went over the 700 mark. The way to get there....GET CURRENT NOW and stay there. Pay down balances and lower your utilization as you can. There is no quick fix to where you are, but you can get there. I would also suggest, join a credit union, if you can. A secured loan may be where you need to start.

Re: Don't understand at all

Anonymous — Tue, 02 Oct 2007 22:23:51 GMT

Very good post bulldog! I agree 100%.

Re: Don't understand at all

haulingthescoreup — Tue, 02 Oct 2007 22:34:46 GMT

@Anonymous wrote:

120 late IS death to your scores

It does NOT have to KILL you for 7 years. I have a 120 day in my past. Add to that a couple 60 days and several 30's. BUT.......I have cleaned up my act. The 120 and several 30+'s are from '02, when I suffered through an unemployment and even longer under employment. I have not had ANY lates since early '06.

Great post, Credit Bulldog! Now that your bad lates are 5 years old, what happens if you run the score simulator? (If you buy a score from myFICO, that is.) Does it still give you a best scenario of pay your bills on time for the next 24 months, or is it finding something else to suggest?

I am so curious to see what will happen when my lates are >2 years. Current FICO's are EQ 654, EX 691, TU 681. EQ does NOT like lates. When I run the EQ simulator and the TU simulator, I get a much higher projected score increase on EQ from paying on time. Lesson learned for good 6 months ago, and will be retained forever.

My util is now under 2%, total CL of $52K on CC's plus another $50K on a HELOC, I have a decent credit mix; I piggybacked on to DH's 18 year old card to mooch some history; I work 65 hours a week and fully fund my retirement and savings; and I really don't have anything else I can do but wait. The only suggestion I get from the sims now is to pay on time. Yeah, Ma, I know, I know.

Re: Don't understand at all

RobertEG — Wed, 03 Oct 2007 06:32:51 GMT

Sure, late baddies fade as time goes on. But the fade is slow, very slow. A 60 late can hit you for around -40, and a 90 late can hit you for around -60 when they first occur, and the decline is slow as time goes by. It takes almost two years to cut those neg. points in half. And, with late payments accounting for over 1/3 of credit score, it is a death knell. Not instant death, but a lingering cancer. Not many can wait for over two years to erase the sins of the past, but FICO dont care. It lingers, like a swelliing prostate.