topic Re: Raising credit score in Understanding FICO® Scoring

Raising credit score

Anonymous — Sat, 13 Mar 2021 17:09:40 GMT

Hello

I'm trying to boost my score and build my credit back from a 2018 Ch7 BK discharge so I've paid down all my credit cards and essentially got to a 5% utilization but my score is dropping and not going up

i have a total of 11 accounts and all zero balance aside from 1 and 1 that hasn't reflected

Just wondering if there is anything I should be doing

Discover - CL 3000 Bal 950

Discover AU - CL 3650 Bal 0

Uber - CL 250 Bal 0

Capital One Quick silver - CL 2500 Bal 0

Chevron - CL 800 Bal 0

Woman within - CL 850 Bal 0

Children's Place - CL 750 Bal 0

Credit One - CL 1100 Bal 0

Target - CL 500 Bal 0

FCCU - CL 1000 Bal 0

American Tires -CL 2400 Bal 0 (1100 not reflected)

I also have a installment loan of $631

Payment of $96 a month

Lastly a car loan of $18,000 but that got sold and will reflect $0 in April

Re: Raising credit score

SouthJamaica — Sun, 14 Mar 2021 02:01:42 GMT

@Anonymous wrote:
Hello
I'm trying to boost my score and build my credit back from a 2018 Ch7 BK discharge so I've paid down all my credit cards and essentially got to a 5% utilization but my score is dropping and not going up
i have a total of 11 accounts and all zero balance aside from 1 and 1 that hasn't reflected
Just wondering if there is anything I should be doing

Discover - CL 3000 Bal 950
Discover AU - CL 3650 Bal 0
Uber - CL 250 Bal 0
Capital One Quick silver - CL 2500 Bal 0
Chevron - CL 800 Bal 0
Woman within - CL 850 Bal 0
Children's Place - CL 750 Bal 0
Credit One - CL 1100 Bal 0
Target - CL 500 Bal 0
FCCU - CL 1000 Bal 0
American Tires -CL 2400 Bal 0 (1100 not reflected)

I also have a installment loan of $631
Payment of $96 a month

Lastly a car loan of $18,000 but that got sold and will reflect $0 in April

Don't be alarmed. Your scores aren't dropping. You just got hit with the all zero penalty. Next time just make sure that at least 1 card reports a small balance before paying it off. (Bank card, not store card. Your own card, not AU card. I.e. in your case it should be your own Discover or the Cap One Quicksilver)

Re: Raising credit score

USMC_Winger — Sun, 14 Mar 2021 05:00:28 GMT

@Anonymous wrote:
Hello
I'm trying to boost my score and build my credit back from a 2018 Ch7 BK discharge so I've paid down all my credit cards and essentially got to a 5% utilization but my score is dropping and not going up
i have a total of 11 accounts and all zero balance aside from 1 and 1 that hasn't reflected
Just wondering if there is anything I should be doing

Discover - CL 3000 Bal 950
Discover AU - CL 3650 Bal 0
Uber - CL 250 Bal 0
Capital One Quick silver - CL 2500 Bal 0
Chevron - CL 800 Bal 0
Woman within - CL 850 Bal 0
Children's Place - CL 750 Bal 0
Credit One - CL 1100 Bal 0
Target - CL 500 Bal 0
FCCU - CL 1000 Bal 0
American Tires -CL 2400 Bal 0 (1100 not reflected)

I also have a installment loan of $631
Payment of $96 a month

Lastly a car loan of $18,000 but that got sold and will reflect $0 in April

Your total revolving debt utilization is below 6%, but your Discover card has a utilization of 31.7% ($950 / $3,000), which is penalizing your score. When you get the balance down below 29% of the CL, you'll pick up some points. Better yet, get the balance down to 9%, and you'll pick up even more points.

You say your American Tires balance is not reflected. Does that mean it hasn't reported yet? If so, that's going to hurt your score when it does, because that's 45.8% utilization ($1,100 / $2,400). To increase your score when/if the American Tires balance reports, pay the balance down to the same utilization levels I mentioned for your Discover card.

You don't mention the balance on the $631 installment loan, but you'll get max points when you've nearly paid it off, as long as you don't have any other installment loans. Get the balance down below 9% for the max points. But once you've paid that loan off, realize that your score will drop, because you're no longer getting the "nearly paid off loan" boost~~, and you're no longer getting the points for ideal credit mix (revolving debt and installment debt)~~.

Re: Raising credit score

Anonymous — Sun, 14 Mar 2021 04:37:21 GMT

@USMC_Winger wrote:
But once you've paid that loan off, realize that your score will drop, because you're no longer getting the "nearly paid off loan" boost, and you're no longer getting the points for ideal credit mix (revolving debt and installment debt).

Paying off a loan does not impact credit mix. Both open and closed accounts are considered when looking at credit mix. The score drop associated with paying off a loan comes from the Amounts Owed sector of the Fico pie... basically the bonus for having an almost-paid-off installment loan goes away.

Re: Raising credit score

USMC_Winger — Sun, 14 Mar 2021 04:57:16 GMT

@Anonymous wrote:
Paying off a loan does not impact credit mix. Both open and closed accounts are considered when looking at credit mix. The score drop associated with paying off a loan comes from the Amounts Owed sector of the Fico pie... basically the bonus for having an almost-paid-off installment loan goes away.

True. Thanks for the correction. I forgot about the closed loans staying on the report for the future FICO score calculations.

Re: Raising credit score

Anonymous — Tue, 16 Mar 2021 05:56:13 GMT

@Anonymous good advice above. But to answer your question we really need to know more about your profile. What's your payment history look like? How about the length of accounts, new credit, and mix? all these contribute.

Re: Raising credit score

Anonymous — Tue, 16 Mar 2021 06:57:08 GMT

I dont think OP got hit with an "all zero" penalty since technically 2 accounts have a balance, currently. Even when the one shows paid off, OP's Disco still has a balance.

I think once the Auto shows "paid", you will still have the installment loan. I am not sure what the original amount was for, but you could figure out what util that is at.

I think with your only AU account reporting $0, that you got hit with the "AU all zero" penalty.

If anything, once the auto loan reports paid and the american tires reports paid, you may see a score bump since there will be less acounts with a balance, and possibly lower installment and individual/aggregate revolving util (sorry, I didn't do the math). I am assumibg the American Tires is a revolving/credit account amd in that case, it being paid off will absolutely help you.

As the poster above said, if you can get the Disco under 30%, or even better, under 10%, that would be most optimal and then throw a couple bucks on the AU Disco and let it report. I think you will be see increases im the future from all these changes that you are waiting on.

Lastly, what scores are going down? Are they Fico Scores or Vantage scores (like from "free" sites like Crefit Karma)?

It looks like you are doing pretty good overall. Congrats on all the pay offs!

Re: Raising credit score

joeyv1985 — Tue, 16 Mar 2021 17:53:46 GMT

@Anonymous wrote:
I dont think OP got hit with an "all zero" penalty since technically 2 accounts have a balance, currently. Even when the one shows paid off, OP's Disco still has a balance.

I think once the Auto shows "paid", you will still have the installment loan. I am not sure what the original amount was for, but you could figure out what util that is at.

I think with your only AU account reporting $0, that you got hit with the "AU all zero" penalty.

If anything, once the auto loan reports paid and the american tires reports paid, you may see a score bump since there will be less acounts with a balance, and possibly lower installment and individual/aggregate revolving util (sorry, I didn't do the math). I am assumibg the American Tires is a revolving/credit account amd in that case, it being paid off will absolutely help you.

As the poster above said, if you can get the Disco under 30%, or even better, under 10%, that would be most optimal and then throw a couple bucks on the AU Disco and let it report. I think you will be see increases im the future from all these changes that you are waiting on.

Lastly, what scores are going down? Are they Fico Scores or Vantage scores (like from "free" sites like Crefit Karma)?

It looks like you are doing pretty good overall. Congrats on all the pay offs!

I agree with LaHossBoss. You're doing well. Just keep your nose to the grindstone and your scores should rise. I recently paid off a car loan in December and it finally reported. FICO 8's dropped 8-18 pts across the board. With only 1 payment left on the auto, installment loans boosted my score. Now that it's off my report, my mortgage loan is the only installment loan that reports and it shows that only 4% of the principal has been paid off(Mortgage is 22 months old). For the next 2 years or so, I'll just concentrate on paying down the principal of my mortgage. I'm using the AZEO method for my credit cards. No car loan means better cash flow IMHO. Nothing wrong with that.

Re: Raising credit score

Anonymous — Tue, 16 Mar 2021 17:58:40 GMT

@joeyv1985 wrote:
I agree with LaHossBoss. You're doing well. Just keep your nose to the grindstone and your scores should rise. I recently paid off a car loan in December and it finally reported. FICO 8's dropped 8-18 pts across the board. With only 1 payment left on the auto, installment loans boosted my score. Now that it's off my report, my mortgage loan is the only installment loan that reports and it shows that only 4% of the principal has been paid off(Mortgage is 22 months old). For the next 2 years or so, I'll just concentrate on paying down the principal of my mortgage. I'm using the AZEO method for my credit cards. No car loan means better cash flow IMHO. Nothing wrong with that.

What was your before/after aggregate installment loan utilization with/without that car loan? Something doesn't sound right, as if you had an open mortgage still the closure of your auto loan shouldn't have dropped your F8 scores 8-18 points across the board... at least not due to the Amounts Owed sector of the Fico pie. Perhaps the change to your loan:revolver ratio played a role, although I don't know that factor to be as impactful as the score gains you referenced. How many revolvers do you have?

Re: Raising credit score

joeyv1985 — Tue, 16 Mar 2021 18:02:33 GMT

@Anonymous wrote:
@joeyv1985 wrote:
I agree with LaHossBoss. You're doing well. Just keep your nose to the grindstone and your scores should rise. I recently paid off a car loan in December and it finally reported. FICO 8's dropped 8-18 pts across the board. With only 1 payment left on the auto, installment loans boosted my score. Now that it's off my report, my mortgage loan is the only installment loan that reports and it shows that only 4% of the principal has been paid off(Mortgage is 22 months old). For the next 2 years or so, I'll just concentrate on paying down the principal of my mortgage. I'm using the AZEO method for my credit cards. No car loan means better cash flow IMHO. Nothing wrong with that.
What was your before/after aggregate installment loan utilization with/without that car loan? Something doesn't sound right, as if you had an open mortgage still the closure of your auto loan shouldn't have dropped your F8 scores 8-18 points across the board... at least not due to the Amounts Owed sector of the Fico pie. Perhaps the change to your loan:revolver ratio played a role, although I don't know that factor to be as impactful as the score gains you referenced. How many revolvers do you have?

It went from 83% to 96%. Here's a thread regarding that matter.

https://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Open-ended-account-appears-to-cause-segmentation-on-8/m-p/6278664#M185288

Re: Raising credit score

Anonymous — Tue, 16 Mar 2021 19:52:46 GMT

I thought a little high for joey too, what it’s worth as well, but we have had a couple report thresholds in between there but that still seems high for that. I could swallow the 8 but the 18 is just an outlier I guess. we know it’s profile dependent, unless there’s more to it and the mortgage is considered separately?

For OP, it wasn’t an AZ loss, but you could be under AU AZ loss on 8/9, since the authorize user account doesn’t have a balance reported.

Re: Raising credit score

joeyv1985 — Tue, 16 Mar 2021 20:05:45 GMT

@Anonymous wrote:
I thought a little high for joey too, what it’s worth as well, but we have had a couple report thresholds in between there but that still seems high for that. I could swallow the 8 but the 18 is just an outlier I guess. we know it’s profile dependent, unless there’s more to it and the mortgage is considered separately?

For OP, it wasn’t an AZ loss, but you could be under AU AZ loss on 8/9, since the authorize user account doesn’t have a balance reported.

Upon further review, my Fico 8 TU dropped 19 points to 778 when the Auto Loan reported PIF. Experian dropped 18 pts to 770 and EQ dropped 8 points to 769 when it reported. However, my Vantage 3.0 TU score takes the cake when it dropped me 31 pts to 763 when the Auto PIF reported. Ouch. When something like that happens, I can't help but think that I'm going to end up in the crosshairs of some of my creditors. To combat that, I'm working to keep my Amex Plat to report no more $500 per month and less than 2% CU for the revolvers($33,500 Total CL) all the while using the AZEO method. And as mentioned, paying off my mortgage principal. I'm taking no chances especially in this environment and the fact that I'm now self employed compared to a year ago.

Re: Raising credit score

Anonymous — Tue, 16 Mar 2021 20:53:55 GMT

BM, do you feel confident in saying that his 8-18 point drops came [only] from aggregate installment loan utilization moving from 83% to 96%, meaning only the Amounts Owed category? I personally do not, just curious your take.

Re: Raising credit score

Anonymous — Tue, 16 Mar 2021 21:29:38 GMT

@Anonymous wrote:
BM, do you feel confident in saying that his 8-18 point drops came [only] from aggregate installment loan utilization moving from 83% to 96%, meaning only the Amounts Owed category? I personally do not, just curious your take.

@Anonymous as I said, it does sound a little high and it did raise my eyebrows as well. Are you suggesting mortgage loans may be counted separately and that was his full award? That would be a rather low award at 9 points on the one bureau and even the 18 at the high end.

definitely open to further speculation.

Oh, @joeyv1985 you needn’t worry about the platinum as it is not factored in the utilization except on EX2. that’s the thing about open ended Accounts true charge cards aren’t factored into revolving utilization, only on a special utilization on EX2.

Re: Raising credit score

joeyv1985 — Tue, 16 Mar 2021 21:37:24 GMT

@Anonymous wrote:
@Anonymous wrote:
BM, do you feel confident in saying that his 8-18 point drops came [only] from aggregate installment loan utilization moving from 83% to 96%, meaning only the Amounts Owed category? I personally do not, just curious your take.
@Anonymous as I said, it does sound a little high and it did raise my eyebrows as well. Are you suggesting mortgage loans may be counted separately and that was his full award? That would be a rather low award at 9 points on the one bureau and even the 18 at the high end.

definitely open to further speculation.

Oh, @joeyv1985 you needn’t worry about the platinum as it is not factored in the utilization except on EX2. that’s the thing about open ended Accounts true charge cards aren’t factored into revolving utilization, only on a special utilization on EX2.

10-4. Thanks Birdman.

Re: Raising credit score

Anonymous — Tue, 16 Mar 2021 23:01:38 GMT

@Anonymous wrote:
@Anonymous wrote:
BM, do you feel confident in saying that his 8-18 point drops came [only] from aggregate installment loan utilization moving from 83% to 96%, meaning only the Amounts Owed category? I personally do not, just curious your take.
@Anonymous as I said, it does sound a little high and it did raise my eyebrows as well. Are you suggesting mortgage loans may be counted separately and that was his full award? That would be a rather low award at 9 points on the one bureau and even the 18 at the high end.

definitely open to further speculation.

No, I definitely don't think that mortgage loans are counted separately. I simply believe his scores gains came from a factor outside of Amounts Owed, as I don't see an aggregate move from 83% to 96% in either direction being significant from what I've read on this forum. If a threshold has been identified in that range though, I stand corrected. I was thinking loan:revolver ratio could be at play, but I'm not sure what OPs file looks like. For example, 2 loans and 8 revolvers would be a 1:4 ratio, arguably ideal... where dropping 1 loan off and moving to 1:8 could be less than ideal. Just sort of thinking out loud.

Re: Raising credit score

Anonymous — Wed, 17 Mar 2021 00:16:27 GMT

@Anonymous wrote:
@Anonymous wrote:
@Anonymous wrote:
BM, do you feel confident in saying that his 8-18 point drops came [only] from aggregate installment loan utilization moving from 83% to 96%, meaning only the Amounts Owed category? I personally do not, just curious your take.
@Anonymous as I said, it does sound a little high and it did raise my eyebrows as well. Are you suggesting mortgage loans may be counted separately and that was his full award? That would be a rather low award at 9 points on the one bureau and even the 18 at the high end.

definitely open to further speculation.

No, I definitely don't think that mortgage loans are counted separately. I simply believe his scores gains came from a factor outside of Amounts Owed, as I don't see an aggregate move from 83% to 96% in either direction being significant from what I've read on this forum. If a threshold has been identified in that range though, I stand corrected. I was thinking loan:revolver ratio could be at play, but I'm not sure what OPs file looks like. For example, 2 loans and 8 revolvers would be a 1:4 ratio, arguably ideal... where dropping 1 loan off and moving to 1:8 could be less than ideal. Just sort of thinking out loud.

@Anonymous no I definitely agree the point changes sounded rather out of range, definitely an outlier, and I'm definitely open to the fact that other factors could've been an in play and you could be correctly identifying one of what could be one or more reasons. Concur.

Re: Raising credit score

joeyv1985 — Fri, 19 Mar 2021 15:30:20 GMT

@Anonymous wrote:
@Anonymous wrote:
BM, do you feel confident in saying that his 8-18 point drops came [only] from aggregate installment loan utilization moving from 83% to 96%, meaning only the Amounts Owed category? I personally do not, just curious your take.
@Anonymous as I said, it does sound a little high and it did raise my eyebrows as well. Are you suggesting mortgage loans may be counted separately and that was his full award? That would be a rather low award at 9 points on the one bureau and even the 18 at the high end.

definitely open to further speculation.

Oh, @joeyv1985 you needn’t worry about the platinum as it is not factored in the utilization except on EX2. that’s the thing about open ended Accounts true charge cards aren’t factored into revolving utilization, only on a special utilization on EX2.

Well, one of my Citi cards just reported and the balance went from $0 to $99(Annual Fee, $10,500 CL) and Equifax dropped me 6 pts to 763. Just can't win. That puts muy the CU of my revolvers at $120 out of $33,500. That's not even at 1/2 percent! Since my Auto reported PIF are my scores that much more sensitive to fluctuations? Amex Plat(Charge Card) is at $228(From $421) and my Mortgage has 4% of the original balance paid off.

Re: Raising credit score

Anonymous — Fri, 19 Mar 2021 16:47:21 GMT

If your Citi reported balane just moved from $0 to $99, you just increased your number of accounts with a balance. That's a scoring metric and could be the reason for your score drop. I would bet on that being the more likely cause rather than the minor utilization percentage change.

Re: Raising credit score

joeyv1985 — Fri, 19 Mar 2021 16:48:37 GMT

@Anonymous wrote:
If your Citi reported balane just moved from $0 to $99, you just increased your number of accounts with a balance. That's a scoring metric and could be the reason for your score drop. I would bet on that being the more likely cause rather than the minor utilization percentage change.

Ok. I just paid it off. Something tells me I'm going to take another hit when I do.