topic Re: 3 point reduction in Understanding FICO® Scoring

3 point reduction

inquring_minds — Thu, 20 Dec 2007 01:37:06 GMT

My EQ score dropped 3 pts for an inquiry.

Will it drop again when the new TL reports? and if it does, will low utilization (3%) offset any possible dip in score (due to new TL)?

Re: 3 point reduction

fused — Thu, 20 Dec 2007 03:30:07 GMT

inquring_minds wrote:

My EQ score dropped 3 pts for an inquiry.

Will it drop again when the new TL reports? and if it does, will low utilization (3%) offset any possible dip in score (due to new TL)?

Good questions! Scores can go up, down and even go unchanged when a new inq and a new account report. What was your indiv and overall util before you apped?

Re: 3 point reduction

inquring_minds — Thu, 20 Dec 2007 12:28:58 GMT

Hi Fused,

3% on one card and 7% on the other for 10% overall.

I am keeping util low to see what kind of gains I receive of the next few months.

Re: 3 point reduction

haulingthescoreup — Thu, 20 Dec 2007 12:58:48 GMT

@inquring_minds wrote:

Hi Fused,

3% on one card and 7% on the other for 10% overall.

I am keeping util low to see what kind of gains I receive of the next few months.

Think it's still middle of the night for fused , so I'll jump in. Depending on the CLI's of your cards, your overall util is probably more like 5%. Total of balances due, divided by total of CL's = total util.

I haven't done a lot of recent app'ing, but looking back over my older scores, I think I recovered my score drop and more by month three. If you work them for optimal util, you'll be pleasantly surprised at what happens in 2008! I would expect that you will see a steady increase in scores as you go along, not just a big jump at the end of one year.

Re: 3 point reduction

inquring_minds — Thu, 20 Dec 2007 13:26:17 GMT

Good morning Hauling,

CL's are -

3k - 3%

2K - 7%

I have a neat spreadsheet setup here I plug in the numbers and it calculates indiv and overall util

Re: 3 point reduction

haulingthescoreup — Thu, 20 Dec 2007 13:41:14 GMT

@inquring_minds wrote:

Good morning Hauling,

CL's are -
3k - 3%
2K - 7%

I have a neat spreadsheet setup here I plug in the numbers and it calculates indiv and overall util

There might be something funny going on with your spreadsheet. If I read your numbers right, you've got $90 out of $3000 (3% ) and $140 out of $2000 (7% ) for a total of $230 out of $5000 = 4.6%.

You might run some trial mock accounts through your program. Give yourself 3 or 4 accounts with $100 limits (makes the math easy!) Make sure that your overall util is totalling the credit limits as well as the balances. Right now it looks as if it's totalling your balances, but averaging your CL's. Or maybe it's summing your individual percentages.

All I know is, your overall percentage can't possibly be higher than your highest individual percentage, or lower than your lowest.

Whew, time for another cup of coffee!

Re: 3 point reduction

fused — Thu, 20 Dec 2007 19:55:55 GMT

inquring_minds wrote:

Hi Fused,

3% on one card and 7% on the other for 10% overall.

I am keeping util low to see what kind of gains I receive of the next few months.

I'm not sure how your overall util can be 10% with individual util of 3% and 7%.?? Since your util was very low to begin with, my guess is you might take a hit when the new account reports.

Message Edited by fused on 12-20-2007 09:55 AM

Re: 3 point reduction

inquring_minds — Fri, 21 Dec 2007 01:11:43 GMT

Am I missing something in the calculations?

I thought 3% + 7% would = 10%

honestly tell me if i'm off, please

Re: 3 point reduction

haulingthescoreup — Fri, 21 Dec 2007 01:25:48 GMT

Percentages aren't added up -- the percentage for overall util is total balance divided by total credit limits. So make sure that the cell than shows total util isn't summing the individual utils.

If you think about it, if someone had 4 cards, 2 with 20% util and 2 with 40%, adding the utils would mean that they had 120% total util. Bad news! But instead, they have 30% total util.

Set up your spreadsheet to calculate the way I have it in my earlier post, and it should come out right.

Re: 3 point reduction

inquring_minds — Fri, 21 Dec 2007 01:41:00 GMT

Thanks Hauling, I need a math refresher - I feel totally stupid!

Message Edited by inquring_minds on 12-20-2007 05:41 PM

Re: 3 point reduction

MidnightVoice — Fri, 21 Dec 2007 01:33:11 GMT

inquring_minds wrote:
Thanks Hauling, I need a math refresher - if feel totally stupid!

Most of us dealing with FICO scoring frequently feel totally stupid

Re: 3 point reduction

inquring_minds — Fri, 21 Dec 2007 01:40:01 GMT

ok, so what should I do now?

I have low utilization and my statement cuts on the 30th and I need a boost in scores. I thought Fico model looked at individual utilization for optimal scores.

Re: 3 point reduction

MidnightVoice — Fri, 21 Dec 2007 01:42:51 GMT

inquring_minds wrote:
ok, so what should I do now?

I have low utilization and my statement cuts on the 30th and I need a boost in scores. I thought Fico model looked at individual utilization for optimal scores.

As far as we can tell, it looks at both. You could try getting both down to less than 5% and then tell us what happens!

Re: 3 point reduction

haulingthescoreup — Fri, 21 Dec 2007 02:07:09 GMT

There's not a day goes by that I don't stare at the laptop and say to myself, "Well, duh!"

Like MV said, you get rated on individual util and on total util. Try having one card PIF'd and the other reporting incredibly low. I got 10-15 points on all three scores recently by having a $7 balance post on one card, $0 on the other 4, $52K+ total CL. I think it was like 1/100 of 1% util. TU especially liked it!

This is now my new happy solution to not worrying about my CC's. I only use one per month, pay it down to 1% before the statement cuts, and there you are. Peace of mind through simplicity!

Re: 3 point reduction

inquring_minds — Fri, 21 Dec 2007 02:13:52 GMT

That's great advice, I will let you know the outcome

Happy Holiday's MyFico Friends!!

haulingthescoreup wrote:
There's not a day goes by that I don't stare at the laptop and say to myself, "Well, duh!"

Like MV said, you get rated on individual util and on total util. Try having one card PIF'd and the other reporting incredibly low. I got 10-15 points on all three scores recently by having a $7 balance post on one card, $0 on the other 4, $52K+ total CL. I think it was like 1/100 of 1% util. TU especially liked it!

This is now my new happy solution to not worrying about my CC's. I only use one per month, pay it down to 1% before the statement cuts, and there you are. Peace of mind through simplicity!

Re: 3 point reduction

haulingthescoreup — Fri, 21 Dec 2007 02:21:19 GMT

And to you!

We need a wreath smiley or something for this time of year.