topic Re: Balance Decrease and Score Decreased in Understanding FICO® Scoring

Balance Decrease and Score Decreased

Anonymous — Wed, 11 Aug 2021 22:07:22 GMT

I am definitely confused by the recent 70 point drop on my TU report. The balance on one of my cards finally reported as decreased by $281 and an inquiry was removed causing a 70 point drop in my score. It is frustrating to not understand how all of this credit stuff truly works. I am reading and researching and everything says to keep credit utilization down. Why would this create a drop in my score vs an increase?

Re: Balance Decrease and Score Decreased

CreditCuriosity — Wed, 11 Aug 2021 22:08:50 GMT

Something more is going on that you don't know about most likely to swing 70 points. I would check your report to make sure a baddy or something else didn't pop onto your report.

Re: Balance Decrease and Score Decreased

IantoJones — Wed, 11 Aug 2021 22:40:25 GMT

I have had this happen too; from what I recall reading elsewhere on these forums, it had to do with something called "rebucketing".

In other words, you were at the top of a bucket of middling performance, and now are in a new bucket with better performers, and you stack up less favorably against them (like grading on a curve).

When it's happened to me before, it usually resolved in about 3mos.

I would search "rebucketing" on here, for better explanations.

Re: Balance Decrease and Score Decreased

CreditCuriosity — Wed, 11 Aug 2021 22:48:07 GMT

@IantoJones wrote:
I have had this happen too; from what I recall reading elsewhere on these forums, it had to do with something called "rebucketing".

In other words, you were at the top of a bucket of middling performance, and now are in a new bucket with better performers, and you stack up less favorably against them (like grading on a curve).

When it's happened to me before, it usually resolved in about 3mos.

I would search "rebucketing" on here, for better explanations.

70 point loss on rebucketing? seems a bit extreme to me. I don't keep up with scoring sub-forum much, but highly doubt that kinda hit.

Re: Balance Decrease and Score Decreased

Anonymous — Wed, 11 Aug 2021 23:01:42 GMT

@CreditCuriosity wrote:
@IantoJones wrote:
I have had this happen too; from what I recall reading elsewhere on these forums, it had to do with something called "rebucketing".

In other words, you were at the top of a bucket of middling performance, and now are in a new bucket with better performers, and you stack up less favorably against them (like grading on a curve).

When it's happened to me before, it usually resolved in about 3mos.

I would search "rebucketing" on here, for better explanations.
70 point loss on rebucketing? seems a bit extreme to me. I don't keep up with scoring sub-forum much, but highly doubt that kinda hit.

Is it possible it is a mistake? I just updated my subscription to Fico Premier so I can monitor monthly and my score says 570. I will wait until tomorrow to see if there are any changes. Not certain if score change mistakes happen or not but...I'm being patient in this. Just want to make sure that I'm not doing something wrong which I know I'm not by paying my cards down to zero balance.

Re: Balance Decrease and Score Decreased

Anonymous — Wed, 11 Aug 2021 23:18:28 GMT

I must add that I've paid off a charged off credit card and a collection account also within the past two weeks. As well as had two student loans removed and a repossession removed.

Re: Balance Decrease and Score Decreased

IantoJones — Wed, 11 Aug 2021 23:29:17 GMT

Mine was a 77point drop, after clearing out a couple thousand in CC debt.

So 70 doesn't seem unlikely to me, but YMMV.

Edit to add: Also had a $4K CLI.

Re: Balance Decrease and Score Decreased

Anonymous — Thu, 12 Aug 2021 00:15:44 GMT

The rebucket theory makes sense. Thank you guys.

Re: Balance Decrease and Score Decreased

SouthJamaica — Thu, 12 Aug 2021 01:30:12 GMT

@Anonymous wrote:
I am definitely confused by the recent 70 point drop on my TU report. The balance on one of my cards finally reported as decreased by $281 and an inquiry was removed causing a 70 point drop in my score. It is frustrating to not understand how all of this credit stuff truly works. I am reading and researching and everything says to keep credit utilization down. Why would this create a drop in my score vs an increase?

1. Reduction of a credit card balance would not cause a score reduction, unless (a) the balance were zero and (b) there were no other cards reporting a balance, in which case you could get an "all zero" penalty... but even then it would not be 70 points.

2. An inquiry being removed might cause a gain in points but would not cause a drop in points.

Re: Balance Decrease and Score Decreased

SouthJamaica — Thu, 12 Aug 2021 01:31:31 GMT

@Anonymous wrote:
@CreditCuriosity wrote:
@IantoJones wrote:
I have had this happen too; from what I recall reading elsewhere on these forums, it had to do with something called "rebucketing".

In other words, you were at the top of a bucket of middling performance, and now are in a new bucket with better performers, and you stack up less favorably against them (like grading on a curve).

When it's happened to me before, it usually resolved in about 3mos.

I would search "rebucketing" on here, for better explanations.
70 point loss on rebucketing? seems a bit extreme to me. I don't keep up with scoring sub-forum much, but highly doubt that kinda hit.
Is it possible it is a mistake? I just updated my subscription to Fico Premier so I can monitor monthly and my score says 570. I will wait until tomorrow to see if there are any changes. Not certain if score change mistakes happen or not but...I'm being patient in this. Just want to make sure that I'm not doing something wrong which I know I'm not by paying my cards down to zero balance.

Unlikely it's a mistake. Likely you're making a mistake in interpretation.

Where, when, and how are you getting these scores you're talking about?

Re: Balance Decrease and Score Decreased

SouthJamaica — Thu, 12 Aug 2021 01:33:02 GMT

@Anonymous wrote:
I must add that I've paid off a charged off credit card and a collection account also within the past two weeks. As well as had two student loans removed and a repossession removed.

We would need to know more details to assess these.

Re: Balance Decrease and Score Decreased

Anonymous — Thu, 12 Aug 2021 02:17:00 GMT

@SouthJamaica wrote:
@Anonymous wrote:
I must add that I've paid off a charged off credit card and a collection account also within the past two weeks. As well as had two student loans removed and a repossession removed.
We would need to know more details to assess these.

Charged off credit card with opensky $147. It was charged off last July. Settled collection account for 644 (was 1100). Don't know how much the student loans were but they were both under 5k. And the repo was with Santander for 8k.

Re: Balance Decrease and Score Decreased

Anonymous — Fri, 13 Aug 2021 10:06:05 GMT

Is it possible it is a mistake? I just updated my subscription to Fico Premier so I can monitor monthly and my score says 570. I will wait until tomorrow to see if there are any changes. Not certain if score change mistakes happen or not but...I'm being patient in this. Just want to make sure that I'm not doing something wrong which I know I'm not by paying my cards down to zero balance.

Unlikely it's a mistake. Likely you're making a mistake in interpretation.

Where, when, and how are you getting these scores you're talking about?

CK shows my score dropped. But MyFico shows my TU and EQ score is 570 and my EX is 580.

Re: Balance Decrease and Score Decreased

kiea — Fri, 13 Aug 2021 13:59:01 GMT

I paid half of a balance due on my closed PayPal credit account and my score went down instead of up. I think it's because the ratio of my available credit vs total amount due changed. FICO is not calculating the credit limits on your charge off cards into your credit limit so when you paid the charge off balance your ulitization increased based on the available credit you have now .

At least that's what happened to me. There are options under the Myfico tabs to see why your score changed

Re: Balance Decrease and Score Decreased

Anonymous — Fri, 13 Aug 2021 15:48:41 GMT

@Anonymous wrote:

Is it possible it is a mistake? I just updated my subscription to Fico Premier so I can monitor monthly and my score says 570. I will wait until tomorrow to see if there are any changes. Not certain if score change mistakes happen or not but...I'm being patient in this. Just want to make sure that I'm not doing something wrong which I know I'm not by paying my cards down to zero balance.

Unlikely it's a mistake. Likely you're making a mistake in interpretation.

Where, when, and how are you getting these scores you're talking about?

CK shows my score dropped. But MyFico shows my TU and EQ score is 570 and my EX is 580.

How much of a change are the MyFico scores from where you were before the balance dropped?

CK scores can be ignored. They are not used by any lender for credit decisions. Synchrony does use VantageScore 4.0, but that model is significantly different than the VantageScore 3.0 provided by CK and many other free credit monitoring services.

Re: Balance Decrease and Score Decreased

Anonymous — Fri, 13 Aug 2021 15:52:40 GMT

@Anonymous wrote:
@Anonymous wrote:

Is it possible it is a mistake? I just updated my subscription to Fico Premier so I can monitor monthly and my score says 570. I will wait until tomorrow to see if there are any changes. Not certain if score change mistakes happen or not but...I'm being patient in this. Just want to make sure that I'm not doing something wrong which I know I'm not by paying my cards down to zero balance.

Unlikely it's a mistake. Likely you're making a mistake in interpretation.

Where, when, and how are you getting these scores you're talking about?

CK shows my score dropped. But MyFico shows my TU and EQ score is 570 and my EX is 580.
How much of a change are the MyFico scores from where you were before the balance dropped?

CK scores can be ignored. They are not used by any lender for credit decisions. Synchrony does use VantageScore 4.0, but that model is significantly different than the VantageScore 3.0 provided by CK and many other free credit monitoring services.

The MyFICO scores are actually higher. Aug 5 my TU was 559. Today it is 570. I'm just going stop using CK then. They just had me very confused.

Re: Balance Decrease and Score Decreased

SouthJamaica — Fri, 13 Aug 2021 18:20:06 GMT

@Anonymous wrote:
@Anonymous wrote:
@Anonymous wrote:

Is it possible it is a mistake? I just updated my subscription to Fico Premier so I can monitor monthly and my score says 570. I will wait until tomorrow to see if there are any changes. Not certain if score change mistakes happen or not but...I'm being patient in this. Just want to make sure that I'm not doing something wrong which I know I'm not by paying my cards down to zero balance.

Unlikely it's a mistake. Likely you're making a mistake in interpretation.

Where, when, and how are you getting these scores you're talking about?

CK shows my score dropped. But MyFico shows my TU and EQ score is 570 and my EX is 580.
How much of a change are the MyFico scores from where you were before the balance dropped?

CK scores can be ignored. They are not used by any lender for credit decisions. Synchrony does use VantageScore 4.0, but that model is significantly different than the VantageScore 3.0 provided by CK and many other free credit monitoring services.
The MyFICO scores are actually higher. Aug 5 my TU was 559. Today it is 570. I'm just going stop using CK then. They just had me very confused.

Thanks for correcting yourself. Yes CK is very confusing.

Re: Balance Decrease and Score Decreased

Anonymous — Fri, 13 Aug 2021 19:03:55 GMT

@Anonymous wrote:
@Anonymous wrote:
@Anonymous wrote:

Is it possible it is a mistake? I just updated my subscription to Fico Premier so I can monitor monthly and my score says 570. I will wait until tomorrow to see if there are any changes. Not certain if score change mistakes happen or not but...I'm being patient in this. Just want to make sure that I'm not doing something wrong which I know I'm not by paying my cards down to zero balance.

Unlikely it's a mistake. Likely you're making a mistake in interpretation.

Where, when, and how are you getting these scores you're talking about?

CK shows my score dropped. But MyFico shows my TU and EQ score is 570 and my EX is 580.
How much of a change are the MyFico scores from where you were before the balance dropped?

CK scores can be ignored. They are not used by any lender for credit decisions. Synchrony does use VantageScore 4.0, but that model is significantly different than the VantageScore 3.0 provided by CK and many other free credit monitoring services.
The MyFICO scores are actually higher. Aug 5 my TU was 559. Today it is 570. I'm just going stop using CK then. They just had me very confused.

Glad to see the scores did go up, which is to be expected! CK is great for checking your daily reports, you can see when balances update, inquiries, etc. The scores provided by it should be ignored. My CK score has been 650, give or take a few points, for the past year despite my actual FICO scoring ranging from the mid-600s to as high as 753.

Re: Balance Decrease and Score Decreased

Yasselife — Sat, 14 Aug 2021 14:20:00 GMT

@Anonymous How many accounts have you opened in the last 12-24mo? That could take down your scores by a lot and takes years to recover from it.
Do you have a clean profile, how's your AAoA?

Re: Balance Decrease and Score Decreased

BrownSugah66 — Mon, 16 Aug 2021 20:29:50 GMT

@CreditCuriosity...My TU score dropped by 40 points today as well. This felt like a gut punch as I have been working so hard at paying down credit card debt. It feels like being punished for doing something good.