topic Re: What just happened???? in Understanding FICO® Scoring

What just happened????

Anonymous — Wed, 15 Feb 2017 09:30:20 GMT

I'm really confused here. My equafax FICO 8 was 650 . I charged 11 dollars on my capital one cc and let the balance show for the 3 credit agencies. TU,EQ,EX. So I could show I was using 5% utilization. And my score dropped 7 points? The explanation was becoz there was zero utilization before. It counts as increase in my balance by 100%??? This is nonesense. Anyone else had this problem? These companies that create these scoring models really try to ruin you. Anyone have an answer for this plz?

Re: What just happened????

elim — Wed, 15 Feb 2017 10:05:32 GMT

Hi and Welcome to the forums!

As your scores slowly increase due to positive tradelines aging on your reports (and the lack of any new lates or derogs), they will fluctuate a few points up and down due to utilization impact. I call it "Fico noise". Don't sweat those small score moves because you will gain more than you lose in the long run. Utilization has no memory and you can manipulate it easily by letting a new balance report on the next statement.

That being said it's best to report a small balance (like you did) on 1 card out of a minimum of 3 total revolving tradelines.

Is this cap1 card your only CC? If so, your scores will fluctuate every time you let a different balance report and it drives your utilization beyond a meaningful threshold (0%, 10%, 30%, etc.).

Re: What just happened????

Anonymous — Wed, 15 Feb 2017 10:24:14 GMT

No. I have discover and first progress also. When I showed a increase on first progress my others TU and Ex went up 22 and 31 points. Just the equafax went down. Also I just did what I did with cap one with discover now. So I'm worried of another drop showing 100 % balance increase again. And thank you for replying

Re: What just happened????

elim — Wed, 15 Feb 2017 10:32:15 GMT

@Anonymous wrote:
No. I have discover and first progress also. When I showed a increase on first progress my others TU and Ex went up 22 and 31 points. Just the equafax went down. Also I just did what I did with cap one with discover now. So I'm worried of another drop showing 100 % balance increase again. And thank you for replying

Don't worry about their wording "100% balance increase", it means nothing (as does a $1 to $2 increase). Just know where your utilization per card stands and know that you can play around with your reported balances and see what the outcome will be concerning your score. Another mistake I have made is seeing an alert that says "the balance on one of your cards as increased" and at the same time seeing a score drop, thinking they were tied together and they were not. Sometimes other factors come into play (new account reporting, AAoA change due to collection falling off, etc.).

Re: What just happened????

Anonymous — Wed, 15 Feb 2017 10:51:17 GMT

OK great. And thank you for the info on this.

Re: What just happened????

Anonymous — Wed, 15 Feb 2017 12:38:26 GMT

Camelot, it wasn't very clear in your earlier posts... but when you let the Capital One card report an $11 balance (up from $0) what were the balances on your other two cards? I saw you mentioned 2 other revolvers, but I don't recall you saying what their balances/limits were (utilization on each).

Ideally, you'd want those other 2 cards to report zero balances if you're going to show a balance on the CO card. This of course would put you at 33% of your cards showing a balance. If one of your other 2 cards had a reported balance across the bureaus, taking your CO card from a $0 balance to a small balance then brings your total revolvers showing a balance to 67%, which, at > 50% could result in a 7 point drop.

My point here is that you just want to make sure that your other 2 revolvers have zero balances reported if you're going to be using your Capital One card to show a small balance monthly as this will maximize your scoring under the utilization sector.

Re: What just happened????

Anonymous — Wed, 15 Feb 2017 16:17:02 GMT

I had a zero balance reported on my discover card and a 38/750 balance from my first progress card. The total utilization was only I think 6% . I thought I need to show a small balance on all cards??.

Re: What just happened????

newhis — Wed, 15 Feb 2017 18:05:52 GMT

The general rule for max points is only 1 card with low balance (could be $10) and others reporting $0

Re: What just happened????

Anonymous — Wed, 15 Feb 2017 18:23:22 GMT

For a grand total of $11, you'll get your 7 points back in about a month. It's good to place a charge on those other cards every once in a while just to keep them in play. The trick is to pay the balance before the statement is cut. Now you know what happens when you jump out of optimal status. Not a big deal. If you need to use a card for an emergency or something, the same thing will happen.

Re: What just happened????

Anonymous — Wed, 15 Feb 2017 18:45:27 GMT

Thanks everyone for all the info and advice. I'll make sure there's only one balance from one card from now on. And I'll rotate cards each month to make sure there is activity on all

Re: What just happened????

Anonymous — Wed, 15 Feb 2017 19:06:01 GMT

@Anonymous wrote:
I had a zero balance reported on my discover card and a 38/750 balance from my first progress card. The total utilization was only I think 6% . I thought I need to show a small balance on all cards??.

No sir. You want to show a balance on less than 50% but more than 0% of your cards, which with your 3 card portfolio only works with 1 card (33%) reporting a balance. Since you allowed 2 cards to report balances you came in at 67% of your cards reporting balances which while better than 0% is worse than being in the 1%-49% (ideal) range. As soon as you let one of those 2 cards with a reported balance report $0, your 7 points will come back immediately.

Re: What just happened????

Anonymous — Wed, 15 Feb 2017 19:08:20 GMT

@Anonymous wrote:
Thanks everyone for all the info and advice. I'll make sure there's only one balance from one card from now on. And I'll rotate cards each month to make sure there is activity on all

You don't need to change which card reports the small balance every month. In fact, it's probably easiest if you keep it consistent and use the same card so that you don't mess up. "Activity" is defined as any use of the credit line, so as long as you are making purchases on all of your cards you are showing activity. Activity does not have anything to do with a reported balance, do don't feel you ever need to report a balance on a certain card to constitute it being active.

Re: What just happened????

Anonymous — Wed, 15 Feb 2017 20:19:49 GMT

I understand now. It's tricky. But thanks to everyone here. I know what to now