topic Re: New Credit Card Drop in Understanding FICO® Scoring

New Credit Card Drop

Anonymous — Sun, 16 Sep 2018 12:18:19 GMT

My FiCO credit score is over 800 at all 3 bureaus (after one 30 day late payment in March 2018).

I am working on an adjustment for that late payment. I have 7 credit cards along with a few charge

cards. I do not use all the credit cards but they all contribute to my history. I have my eyes set on a

new credit card but am worried about the impact on my score. Any idea on how much it will drop by

- is it more like 10 to 15 points or more?

Thanks

Re: New Credit Card Drop

Thomas_Thumb — Tue, 18 Sep 2018 11:28:32 GMT

@Anonymous wrote:
My FiCO credit score is over 800 at all 3 bureaus (after one 30 day late payment in March 2018).
I am working on an adjustment for that late payment. I have 7 credit cards along with a few charge
cards. I do not use all the credit cards but they all contribute to my history. I have my eyes set on a
new credit card but am worried about the impact on my score. Any idea on how much it will drop by
- is it more like 10 to 15 points or more?

Thanks

Awesome, an example of a "recent" 30 day late maintaining clean scorecard status and scores over 800 to boot. A score above 800 with a recent late is highly unusual.

The 10 to 15 point score drop for adding a new card is a bit low - IMO. Given your AoYA is over 12 months, 20 to 25 points is more likely. Personally, I'd wait until the late is at least 12 months old before applying for the card. Of course, by then you may be able to get the late removed if that's what you mean by "adjustment".

A recent 30 day late (under 12 months) often drops score 80 to 100 points. Therefore, I'd avoid an event that may trigger a status change on the impact of the late. Also, you may get denied due to the relative recent late.

The below graph is from ABCD

Re: New Credit Card Drop

Brian_Earl_Spilner — Sun, 16 Sep 2018 14:11:42 GMT

Your score is over 800. A 10-15 point temporary drop is going to do nothing to your ability to get the best rate on anything you apply for.

Re: New Credit Card Drop

Revelate — Sun, 16 Sep 2018 17:52:40 GMT

Where are you getting your scores from and what's the data in your file? Also are you absolutely certain that account is not under dispute given you mentioned you're talking to the lender about an adjustment?

I apologize for being skeptical but I went from 825 to 721 on EX FICO 8 when a 30D got tacked onto my file, which is over 100 point drop and EQ FICO 8 took a 95 point one as well. Heck I lost 46 points on TU FICO 8 and I already had a several year old 30D on there depressing my score already. The recent missed payment reason code is brutal on one's scores.

My file wasn't a godlike 850 but it was pretty strong before that compared to the average bear, and you lose a lot for any recent negative when you're a clean file, and while I've recovered some I don't think I'm getting anywhere close to an 800 at the 6 month mark.

Re: New Credit Card Drop

Anonymous — Mon, 17 Sep 2018 00:34:20 GMT

@AnonymousAny idea on how much it will drop by
- is it more like 10 to 15 points or more?

We don't have enough information here to really give an accurate guess. It could really be anything from 0 points up to probably 30 points, give or take. A couple of important questions I'd ask are what is your current AoYA and AAoA? What would your AAoA drop to with the addition of a new account? How many scoreable inquiries (within the last 365 days) do you have per bureau?

Re: New Credit Card Drop

Anonymous — Mon, 17 Sep 2018 13:02:46 GMT

I signed up for the $1 offer from CCT and I am getting my 3B FICO scores from there. I also have a few credit cards that show the score and they all show over 800 recently. I did not file a dispute and the March 2018 is indeed 30 day late at all 3B's. I just sent a GW letter to the company that filed the 30D late and expect a GW adjustment given the circumstances, length of account, etc but we shall see. I do have CK and WH but they show VS scores which also have gone up.

I did have another 30D late back in June 2016. When I got the second one it did drop my score to the 750's. It slowly crept up to 780. However I managed to get a GW reversal on the June 2016 one and after that it is over 800 now.

Thanks.

Re: New Credit Card Drop

Anonymous — Mon, 17 Sep 2018 13:09:22 GMT

My AAoA is 9 years 3 months. I have 22 active accounts if I get a new card it will drop to abount 8 years 9 months (if my math is correct). My youngest account is 1 year 1 month. I have 2 inquiries on my account and one of the two will drop off next month. Thanks.

Re: New Credit Card Drop

Anonymous — Mon, 17 Sep 2018 15:50:06 GMT

Do you know what your three FICO 8 scores were prior to the recent late? If your score was 845+ then what you might be describing is possible.

If not then I'd share Revelate's skepticism -- somehow FICO 8 is not properly evaluating the recent late or you would have gotten a bigger penalty.

A key thing for the scoring theorists to consider is that you already had a Day 30 late prior to the recent Day 30. The older Day 30 late was not 1.8 years old at the time that the second Day 30 late occurred. So our OP already had a "somewhat" recent Day 30 on his report (< 2 years) at the time that the second late occurred. That would soften the impact compared to an absolutely pristine report getting its first derog.

We'd already learned about a second undsiclosed late. Is it possible that there is a third?

Note also that his score might have dropped significantly at the time of the most recent late (when his Age of Youngest account was 11 months) but has since gone up substantially (since his Age of Youngest is 13 months now).

All of which is a lesson in treating the "data" and "datapoints" posted by people with caution, since there is often key information missing.

Re: New Credit Card Drop

Anonymous — Mon, 17 Sep 2018 17:17:24 GMT

Dont know what my score was prior to first drop but I refinanced my mortgage in Dec 2015 and got the best rate possible. I share the mortgage and several cards with my wife (with one of us being authorized users and the other primary) and she is at 847 at Ex. Luckily the ones that had lates were mine alone - she has her own Kohl's so that we maximise the odds of getting the 30% discount and she does not use Amex (which were the 2 cards that dinged me).

There are no other lates or anything on my accounts and I now monitor it like a hawk. Other than one late (the second late is forgiven now), I have all a long history with no negatives, very low utilization, lots of cards with 0 balance and very few inquiries and that has been the case for a few years. The only negative is that I have a lot of cards but most have 0 balance.

Re: New Credit Card Drop

Thomas_Thumb — Tue, 18 Sep 2018 12:56:03 GMT

@Anonymous wrote:
My AAoA is 9 years 3 months. I have 22 active accounts if I get a new card it will drop to abount 8 years 9 months (if my math is correct). My youngest account is 1 year 1 month. I have 2 inquiries on my account and one of the two will drop off next month. Thanks.

Just to recap, you currently have one 30 day late showing up on all three CRA reports. That late is 6 months old - yes? Your Classic Fico 8 scores are all above 800 based on a recent CCT report. Can you please list date last scores were obtained and exact score for each CRA.

Do you have a trend graph of your scores over time? Did they recently spike up? If so what were the scores before the spike? A couple possibilities for a spike are the account with a 30 late being coded as a dispute and the late aging past 6 months. However, as the graph above shows, a single 30 day late between 6 months and 12 months age typically impacts score by more than 50 points.

Consequently, one would expect scores to be held below 800 - if the late is counting. According to the graph, impact of a single 30 day late does not drop below 50 points until 12 months. Your results are an outlier. Thus, the comments from various posters and requests for additional details to better clarify and gain more insight.

I understand you have not yet filed an official dispute. However, if you had any communication with the creditor, the creditor may have recoded the account as being in dispute.

Re: New Credit Card Drop

Anonymous — Tue, 18 Sep 2018 12:29:26 GMT

I would think that for whatever reason this late payment isn't being seen by the FICO algorithm. OP, what are the FICO negative reason statements you are provided with for your file?

Re: New Credit Card Drop

Anonymous — Tue, 18 Sep 2018 15:18:36 GMT

Only communication with creditor that had 30 day late was this week in which I sent a GW letter acknowledging that it was my error, explaining why it happenned and corrective action taken by me (basically an automated pay in future). Only other prior communication was me calling the 800 number and all they did was refund the late fee and the representative was unaware of what to do about the credit report and said there was nothing he could do. I let it pass and did not file a dispute.

The negative from the CCT is attached. I am loath to give details that can identify me in case it is a real error. Dont want to see my score go down . I think what happenned is that the prior Late cushioned this late and there were a bunch of scenarios that happenned that led to my score being what it is.

Someone asked for a timeline. Prior to recently I used to only periodically monitor using some free credit card sites like Barclays, Discover, Citi etc and so details are hazy but this is a rough timeline.

July 2016 - First late payment. Dropped score to appx 760. Dont know what it was prior but guessing it was 830+

July 2016 to March 2018 - Score recovers to 800 and then drops to 760 on second late in March 2018

June - July 2018 - I go on vacation taking 2 cards with me and make a bunch of mistakes. First I let one card get to 30% utilization. I then let a second card get to 30% utilization and then the first card gets to 50% utilization. Now I have one card at 50% and the other at 30%. My overall utilization is still less than 7%. I also let a retailer cancel a little used store card beacuse of no usage on it.

August 2018 - I find my score at less than 740 and panic. For the first time I am aware of the per card utilization and take steps to correct things. I pay off both cards in early Aug but only the 30% card reports in Aug and now I have only one card at 50% utilization. One inquiry drops off my record as well. My score is now at 770. In the last week of Aug, the second card reports and I have low utilizations in 2 cards and 0 balances everywhere. I also get a GW credit on the first late and now my report shows only one late.

Sep 2018 - My score is 801 at one B. I am not going to post the other B scores (scared they will identify and lower my scores but they are all marginally over 800.

This is what I remember and since I am recalling from memory, details may be a bit off.

There were many events going on and I think something cushioned my fall.

Image from CCT

Re: New Credit Card Drop

Anonymous — Tue, 18 Sep 2018 15:35:12 GMT

And here is the score from CCT...

Re: New Credit Card Drop

Anonymous — Tue, 18 Sep 2018 15:44:42 GMT

When I'm referring to negative reason statements, they're not found under the "overview" tab on CCT where you took that image from. What you want to do is click the "score" tab and then to the right you'll see a list of factors hurting your score. For scores > 800, CCT may omit the negative reason statements, but I'm not 100% sure at what point that happens. Other sources are known to still provide you with negative reason statements even when your score is 850. My Lowe's credit card does for example, as does my mortgage provider.

Re: New Credit Card Drop

Anonymous — Tue, 18 Sep 2018 17:26:52 GMT

It has the 1 missed payment under the Score -> What's Hurting section. There are a bunch of factors on the corresponding Whats Helping section.

Re: New Credit Card Drop

Thomas_Thumb — Wed, 19 Sep 2018 03:08:25 GMT

@Anonymous

wrote:
Only communication with creditor that had 30 day late was this week in which I sent a GW letter acknowledging that it was my error, explaining why it happenned and corrective action taken by me (basically an automated pay in future). Only other prior communication was me calling the 800 number and all they did was refund the late fee and the representative was unaware of what to do about the credit report and said there was nothing he could do. I let it pass and did not file a dispute.

August 2018 - I find my score at less than 740 and panic. For the first time I am aware of the per card utilization and take steps to correct things. I pay off both cards in early Aug but only the 30% card reports in Aug and now I have only one card at 50% utilization. One inquiry drops off my record as well. My score is now at 770.

In the last week of Aug, the second card reports and I have low utilizations in 2 cards and 0 balances everywhere. I also get a GW credit on the first late and now my report shows only one late.
Sep 2018 - My score is 801 at one B. I am not going to post the other B scores (scared they will identify and lower my scores but they are all marginally over 800.

There were many events going on and I think something cushioned my fall.

Image from CCT

Thanks for the information.

If you get the last late removed and avoid applying for or getting a new card, your profile potentially could score 840 to 850. - You have an open refi mortgage on file with over 2.5 years payment history but, a high loan B/L ratio might be holding down your score a bit (say 10 points). What is the balance to loan ratio (B/L) on your mortgage?

As mentioned before, try getting the late removed before applying for a new card or wait until the late ages past 12 months. If you get the late removed and your score spikes to 840 - 850 from the 800 - 810 range, that futher validates the late is currently influencing your score.

Side note: The card at 50% utilization likely is impacting your score negatively by 5 to 10 points.

Re: New Credit Card Drop

Anonymous — Wed, 19 Sep 2018 13:47:49 GMT

Thanks. I was left a message by someone in the Executive office yesterday about the Goodwill credit for the last late. I will call back and hopefully will be able to get that removed. Also the card with the 50 percent utilization has been paid off and my new 800+ score reflects that payoff.

Regarding your questions, I have 2 active mortgage loans. One of them dates back to May 2014 and I have a 90K balance on a 15 year refinanced 145K loan. The other one dates back to Nov 2016 and I have a 280K balance on a 30 year refinanced 315K loan.

Regarding the additional card that I wanted to apply for, I have decided to have my wife apply for it in her name alone. That serves the purpose I wanted it for. A question for the board is what happens to my score if she adds me as an authorized user either during the application or later? - it is a Citi card and we do have a different Citi card and she is pre-approved for the card we want.

Another question is this - I am considering a new mortgage loan for a new property in a few months. One of the two mortgage accounts is a rental and the other will convert to a rental as well. The new mortgage loan I am considering would be something like 450K loan on a 600K home. My mortgage broker tells me that he will be able to pull it off based on income, etc. What does this do to my credit score? I assume there will be a inquiry on my account. I do have 2 current inquiries but the one done in Oct 2016 (for the earlier mortgage refinance) is going to drop off next month.

Thanks.

Re: New Credit Card Drop

Anonymous — Wed, 19 Sep 2018 14:39:49 GMT

If you already have 2 mortgages at fairly high utilization and add a third, I wouldn't expect a significant scoring impact. Sure you'll see a few points go from the inquiries, but in terms of the amounts owed slice of the FICO pie and percentages the impact would be little to nothing IMO.

Re: New Credit Card Drop

Anonymous — Thu, 20 Sep 2018 12:26:59 GMT

Thats an side effect of the regular mortgage refinancing that I used to do. I refinanced several times when rates were falling. I did get better rates but each time there was an inquiry.

What I did not was that each time I refinanced, the new mortgage balance was lower than the old since I would refinance only the existing balance and my new utilization would start out at 100%.

Re: New Credit Card Drop

Anonymous — Thu, 20 Sep 2018 12:33:26 GMT

Yup, I didn't really understand that either when I refinanced. Of course, that was before I got into understanding credit at all and many years before I found this forum. My original thought would have been that the new loan would have showed the old original balance pre-refi, meaning that utilization would stay the same. Looking at it now from a more informed lens, it's pretty clear to me that a new loan is going to have a different original balance than an old one, so the fact that you start back at 100% utilization on it makes sense to me.