topic Re: I hope a credit expert can help me figure this out or help me get Experian to fix this in Understanding FICO® Scoring

I hope a credit expert can help me figure this out or help me get Experian to fix this

Anonymous — Sun, 13 Feb 2022 16:16:19 GMT

Hello,

This is truly ubelievable, someone please help me figure this out. I understand that Experian only allows people to report inaccuracies such as incorrect accounts, balances, payments, etc etc with each credit account on your report, BUT they do not allow people to report inaccuracies with a score plummeting 14 points for no reason. I tried contacting experian by phone but they only gave me the option to either buy a credit report or report an inaccurate account... nothing about reporting inaccurate scoring. This really upsets me because I've been working on my credit for 2 years and now it's still at what it was almost 2 years ago. It makes me worry that my future is screwed when it comes time for me to get a house/mortgage (I'm waiting for my score to get higher to take advantage of better rates... but I worry that I am waiting for nothing, now that I know my score can plummet drastically out of the blue FOR NO REASON!). What if this happens again before I'm ready to buy a house or get a new car?? What do I need to do to keep this from happening again?? Should I report this?? If so, please someone help me figure out how I can report this.

Here's what happened in a nutshell:

I have access to all three fico scores, which are updated daily. I use Experian.com for one, and then I get my other two for free through personal bank accounts. All of a sudden three days ago my score on Experian.com (but NOT equifax or Transunion) dropped an entire 14 points for literally NO reason. When I click on the link that explains what "factors went into the score change", it says that: "You used to have 7 accounts with balances, now you only have 6. This could either help or lower your score". And everywhere I look online for credit advice, does it ever say that you should keep balances on your credit cards for months, and not pay them off 100% each month. In fact they all say the opposite is what helps your score (and in the last 2 years of my credit journey, that has been true, where EVERY time I make my credit utilization go back down to 0, and pay off a credit card balance 100% after only 1 month, my score goes UP, NEVER down). And never had this happend to me before, nor have I seen anyone report this happening to them, in all of the online credit forums. I have not had ANY of my accounts closed, either.

The ONLY thing that happend in the past month, was that I simply paid off a $170 balance on a credit card by the due date (down to zero, thanks to the credit card company reporting my "current" balance last month, even though I pay them off 100% by the due date each month). That's all. I did NOT close it. I didn't have ANY late payments, credit inquiries, nothing. Literally NOTHING happened/changed recently. All three of my credit reports don't show anything bad that recently happened. It DID say on Experian that one of the recent changes was that my credit utilization ratio went from 30-something percent to 0 percent, with a thumbs up saying that's a good thing (thanks to paying off the balance on my credit card).

In the past 2 years, I always paid off my balances COMPLETELY to a zero balance on the due date. I never kept a balance or had interest charges. My credit card issuer reported my "current balance" at least 6 or 7 times making my credit utilization rate go to over 20 or 30 percent, but then I would pay off that balance down to zero, and then the next month the credit report would show that I paid off my balance and my utilization would drop to zero again. This happend like I said 6 or 7 times. So this is not new. And EACH time my report was updated that I had a zero balance on all of my credit cards (0% utilization), my score would go UP at least 3 points. NEVER down. So why all of a sudden, would something that happened to me 7 or more times, make my score DROP? And not just a few points, but a WHOPPING 14 points??

Does Experian's explanation of my score change of "you used to have 7 accounts with balances, now you have 6" (most of these accounts are utilities through Experian Boost), mean that because my credit card that I paid off to a zero balance (just like I've done many times before), that that is a BAD thing?? Does Experian see that paying off your credit card balance every month on time for more than 2 years as bad?? Because they WANT me to carry a balance for more than one month sometimes to prove I can allow interest?? I dont get it. Please someone who specializes in FICO scores explain this??

And if this is an error, then how do I get Experian to fix it?? How do I talk to a human and not an automated system (and not through the subject of "purchasing your credit report")? Why would all of a sudden paying off my balance, like I've ALWAYS done, make my score drop SO MUCH?? Do I need to carry a balance once every two years, and allow interest to accrue for a few months, or what?? I thought that was bad and made your credit score DROP?? I'm so confused. Please help! Thank you!

Re: I hope a credit expert can help me figure this out or help me get Experian to fix this

Revelate — Sun, 13 Feb 2022 16:20:22 GMT

Wasn't explicitly stated but I suspect all your revolving balances are $0.

That is a penalty, albeit a small one comparitively. You want to have at least one revolver reporting a non-zero balance to correct for that. Just let one report before paying it off and you'll get those points back.

Welcome to the forums!

Re: I hope a credit expert can help me figure this out or help me get Experian to fix this

Anonymous — Sun, 13 Feb 2022 17:10:34 GMT

I'm sorry but I didn't really understand anything you said there?

And FYI, I shouldn't have a "penalty" for doing the SAME THING I have done for TWO years. For two years, I have paid off my credit card balance 100% BEFORE the due date. I have NEVER carried a balance past the due date. The only balances that are reported are my "current" balance that gets reported before the due date and before I pay it off. NOTHING has changed in the past month. So why would I have a penalty suddenly for having zero balance on my cards?? Doesn't make any sense at all!

Thanks for the welcome

Please someone help me figure this out?? Thank you!

Re: I hope a credit expert can help me figure this out or help me get Experian to fix this

Anonymous — Sun, 13 Feb 2022 16:45:31 GMT

You say "just let one revolver account report a non-zero balance and you'll get those points back"... but the thing is, every 2 months for the past 2 years, I DO have a non-zero balance reported on at least one credit card. Because they report my "current balance" before the due date (before I pay it). And then the next month it shows that balance went to zero. And then the next month after that, it goes from zero to a balance. Every other month it is the same, for two years. It goes from a balance, to zero balance, every two months. Nothing is different. This has to be a mistake. How do i report this?

Re: I hope a credit expert can help me figure this out or help me get Experian to fix this

EAJuggalo — Sun, 13 Feb 2022 17:10:03 GMT

If all of your revolving accounts are reporting a zero balance there is a penalty, because it looks to the algorithm as if you are not using any credit.

Now you can continue to yell at the people that are trying to help you, or you can shut up and listen, maybe learning something.

Paying everything off by the due date is a good practice but almost all of the card issuers report to the bureaus the amount that shows up on your statement each month. If you charge something between the due date and one or two days before the statement cut date that is going to be reported. If you want to maximize your score, you want all revolving accounts except one to report 0 and the one to report between 3 and 8%. Like @Revelate posted above, if you're getting an all zero penalty, all you have to do to correct it is to let one of your cards report a balance, ideally between 3 and 8% of the credit line.

The other possibility is that your file moved into a different bucket on Experian. If that happened it can do wonky things to scores. No one in a customer facing role at Experian is going to be able to explain to you the different buckets and how they interact. You may be able to do some research here and figure out what happened.

How many revolving accounts do you have?

14 points is not "plummeting drastically" it is well within the normal swing that people see if not constantly trying to optimize. What score range are we talking, once you get above or below certain numbers 14 points isn't going to make a difference between approval, denial or terms.

Re: I hope a credit expert can help me figure this out or help me get Experian to fix this

SouthJamaica — Sun, 13 Feb 2022 17:14:29 GMT

@Anonymous wrote:
You say "just let one revolver account report a non-zero balance and you'll get those points back"... but the thing is, every 2 months for the past 2 years, I DO have a non-zero balance reported on at least one credit card. Because they report my "current balance" before the due date (before I pay it). And then the next month it shows that balance went to zero. And then the next month after that, it goes from zero to a balance. Every other month it is the same, for two years. It goes from a balance, to zero balance, every two months. Nothing is different. This has to be a mistake. How do i report this?

It depends on the lender. Since you haven't identified them, we can't say.

Most, but not all, lenders report the statement balance as the reported balance. We would need to know the specific lender to tell you what the reporting date is. But if you've been following experian.com closely, you should know that.

You say that you have a balance reporting every 2 months. In months you have no balance reporting you'll receive the "all zero penalty", and in months where you do have a balance reporting, you won't.

Re: I hope a credit expert can help me figure this out or help me get Experian to fix this

Jnbmom — Sun, 13 Feb 2022 17:18:35 GMT

You will sometimes indeed receive a penalty for all accounts reporting a zero balance . As was posted let a small balance report . There is nothing to dispute or report to Experian.

And you should be happy and appreciate that someone posted a reply and advice rather quickly .

Re: I hope a credit expert can help me figure this out or help me get Experian to fix this

Anonymous — Sun, 13 Feb 2022 17:27:43 GMT

Hello,

Thank you for your in-depth reply. And FYI, I am not yelling at anyone, sorry if it came across that way. The all caps that I use is not me being angry or yelling or frustrated, that is just my writing style. It's simply me trying to make a point as clear as possible. I do appreciate all help, and of course I am listening, that is why I am here. I simply did not understand what the last guy said, and then decided to add a bit more in-depth explanation in hopes that I could clarify any misunderstandings.

So you are saying that I should "allow only one credit card to have a balance". I probably should have explained this earlier, but I'm trying not to make this into a novel: I only ever use one credit card out of the 5 revolving accounts I have open that all have a zero balance. This one credit card, every 2 months, gets reported with a balance. The other month in between, this credit card is reported with a zero balance. So every other month there is a small balance, and then the next month is zero. This has been going on for two years now. And every single time this one credit card is reported WITH a balance, my score drops 2 or 3 points. Then, the following month when it is reported to have a ZERO balance, my score goes back up 2 or 3 points. That's how it has always been for 2 years.

Last month for the first time in a long time, my utilization was over 20 percent. The 10+ months before that, my utilization was always between 0-8 %. So only recently did my utilization go up as high as it was last month. But then this month when it showed I paid off this credit card balance down to zero (just like what has been reported every other month for two years), I got a 14 point increase.

I hope that helps clarify everything. Please don't assume I am yelling or upset... I am not at all, just trying to clarify things, that's all that is meant when I use caps.

Thank you!

Re: I hope a credit expert can help me figure this out or help me get Experian to fix this

EAJuggalo — Sun, 13 Feb 2022 17:36:50 GMT

It sounds like something else on your report is reporting as a revolving balance, so the two or three point difference is the difference between one account reporting a balance and two. In your OP you stated that the balance on the one account in use was reported at over 30%, anytime you have an individual account report over 30% you are going to take a hit. All of this is scorecard dependant, what you're overall credit profile looks like.

Re: I hope a credit expert can help me figure this out or help me get Experian to fix this

Anonymous — Sun, 13 Feb 2022 17:48:29 GMT

I do understand that my score will take a larger hit if the utilization ratio goes higher than 30%. But this was LAST month when it was that high, and I already took that hit. Experian told me last month that my score dropped because of this higher utilization. My score went down 5 points because of that high utilization. So since I have ALREADY been penalized for the high utilization, it's not going to give me an additional penalty an entire month later for the same thing that happened a month ago. What Experian says is the reason for the 14 point decrease, is NOT the credit utilization increasing from last month, but the fact that my "accounts with balances" decreased by one (because I paid off this credit card to a zero balance, just like I've done every other month for two years, but yet this is the first time in two years where I was penalized by this many points for having a zero balance). Actually, I have never had my score drop during the months where my utilization was at zero percent and had no balances. It always went up when this happened. This is the first time this has ever happend to me. My score only ever goes up 2 or 3 points each month, whether I have a utilization of zero or 8. And I am still at "fair" credit, there's no bucket or difference. There is seriously no large difference between this month and the last 6 months. Thank you again.

Re: I hope a credit expert can help me figure this out or help me get Experian to fix this

FireMedic1 — Mon, 14 Feb 2022 10:29:40 GMT

You asked for the "experts" to help out. Not that I am. But have I been here for 6 years. Very very simple. Never let all your cards report zero balance as others have said. That causes a score drop. Its called AZEO. All Zero Except One. Pay all your cards down to $0 balance except one and leave $20 to post on statement date. Then pay it after its posted before the due date. Its that easy. Scores wont roller coaster. No $0 balance penalty. No interest paid. Good Luck.

Re: I hope a credit expert can help me figure this out or help me get Experian to fix this

OmarGB9 — Mon, 14 Feb 2022 16:24:45 GMT

I would go over your reports before and after the score drop very carefully and watch for ANY changes.

Also, there IS no way to dispute a score change....

Re: I hope a credit expert can help me figure this out or help me get Experian to fix this

yapsalot — Tue, 15 Feb 2022 17:40:05 GMT

OP: the dedication you have shown by attending to your credit for two years shows your seriousness. Now you have to do the easy part: learn more about credit.

The posts on this site are good, reliable knowledge by people who have an excellent understanding of credit... a resource you need now.

Here's one tiny tip: the info the credit bureaus put on their websites to explain variations in credit scoring isn't reliable. So ignore what Experian says is the reason your score changed.

One other thing: the folks here who know credit scoring can probably give you better direction if they had more details of your credit. You might want to consider posting each creditor name, date opened, account limits, current balance, type of credit, e.g. revolving, installment loan, or other. And the scores from each of the bureaus and identify whether those scores are FICO scores. Vantage scores and any of the other non-Fico scores are unreliable and can safely be ignored.

Good luck!

Re: I hope a credit expert can help me figure this out or help me get Experian to fix this

SoCalGardener — Sun, 20 Feb 2022 01:10:42 GMT

OP, your use of the word 'plummet' regarding a 14-point drop in credit score made me chuckle! My scores vary 50, 60, 70 points OR MORE month-over-month and I don't even blink.

With that said, however, I must point out that I don't blink because I know *why* it dropped. For example, when I've just spent several thousand dollars per card, on multiple cards, I fully EXPECT my score to drop. So when it does, it's no big deal.

In your case, if you're absolutely sure nothing's changed from how you've been doing things for the past two years...I don't know. There's generally a reason for score drops, obtuse though they may be. With you, my gut instinct is that it's an all-zero issue, although that conflicts with what you've stated, so I don't know!

Going forward, I highly recommend taking the AZEO advice, i.e., keeping all cards with $0 balances except one; always have one card report a balance, every month. It doesn't matter which card, and it doesn't matter if it's the same card each month or different. The point is to always have it look like you're actively using your credit.

Finally, the 'reasons'--and I'm using that term loosely!--given for score changes can have little to NOTHING to do with your actual situation. For some examples, have a look at my thread on what Equifax says affects my scores.

Re: I hope a credit expert can help me figure this out or help me get Experian to fix this

tortoise_credit — Sun, 20 Feb 2022 15:56:41 GMT

> And I am still at "fair" credit, there's no bucket or difference.

I'm also no expert, but OP you should read more about bucketing / scorecards. They do not have anything to do with a "fair" rating. Even if there were no account changes, you may have passed a threshold with your average age of accounts, age of oldest account, etc. This can group you in with other consumers who have better scores, and cause your score to drop.

Good luck with your scores and welcome to the forums!

Re: I hope a credit expert can help me figure this out or help me get Experian to fix this

OmarGB9 — Mon, 21 Feb 2022 14:43:54 GMT

@SoCalGardener wrote:
OP, your use of the word 'plummet' regarding a 14-point drop in credit score made me chuckle! My scores vary 50, 60, 70 points OR MORE month-over-month and I don't even blink.

With that said, however, I must point out that I don't blink because I know *why* it dropped. For example, when I've just spent several thousand dollars per card, on multiple cards, I fully EXPECT my score to drop. So when it does, it's no big deal.

In your case, if you're absolutely sure nothing's changed from how you've been doing things for the past two years...I don't know. There's generally a reason for score drops, obtuse though they may be. With you, my gut instinct is that it's an all-zero issue, although that conflicts with what you've stated, so I don't know!

Going forward, I highly recommend taking the AZEO advice, i.e., keeping all cards with $0 balances except one; always have one card report a balance, every month. It doesn't matter which card, and it doesn't matter if it's the same card each month or different. The point is to always have it look like you're actively using your credit.

Finally, the 'reasons'--and I'm using that term loosely!--given for score changes can have little to NOTHING to do with your actual situation. For some examples, have a look at my thread on what Equifax says affects my scores.

Actually it does matter to an extent. Store cards, charge cards, and Chase bank cards are all no-no's when it comes to using them as your "except one" card.

Re: I hope a credit expert can help me figure this out or help me get Experian to fix this

krit — Tue, 22 Feb 2022 07:08:38 GMT

@OmarGB9 Just curious: How come AZEO doesn't work with Chase? Thanks.

@

Re: I hope a credit expert can help me figure this out or help me get Experian to fix this

EAJuggalo — Tue, 22 Feb 2022 12:27:30 GMT

@krit wrote:
@OmarGB9 Just curious: How come AZEO doesn't work with Chase? Thanks.

@

Because Chase reports anytime your account goes to 0. So if you have a Chase card as your "except" and it cuts with say a $50 balance, as soon as you pay that it will report again as 0. Which will give you the all 0 penalty.

Re: I hope a credit expert can help me figure this out or help me get Experian to fix this

AceTen — Tue, 22 Feb 2022 13:02:53 GMT

Thanks to Sunny and all the posters for sharing. I just wanted to chime with a data point regarding AZEO and experian and also share a few bank peculiarities.

I always let one card report a balance, but sometimes reporting will be off by a day or two so all my cards will report as $0. Last month my experian dropped by 24 points for that all zero penalty. I was aghast. But the 24 points came right back a few days later via an experian alert when a chase card reported $70. I have never seen a 24 point drop like that, but I only get the free reports so I do not see the daily numbers.

Chase is useful to me when doing AZEO because they will report a $0 balance mid cycle. Chase usually only reports after the statement cuts but if you pay off mid cycle then they report $0. So if I miss a date somewhere and a balance reports I can always pay off whichever chase card I have that small balnce reporting to get to AZEO in a few days, instead of waiting all month. I do not need to maximize my scores for any reason, I am just "nitty" or perhaps have ocd tendencies. Maybe it's a weird hobby.

US Bank is peculiar because they report the balance at the end of the month (last day of month usually). So the statement balance never gets reported, as far as I can tell. Therefore, I pay all my USbank cards before the end of the month to get that $0 reported.

My other lenders such as Navy Federal and TD bank report after the statemnt cuts, so I make sure they are paid before the statement cuts.

I have found that there is always something new to learn when dealing with credit and banks, no matter how long one metriculates at the myfico university. I hope to see you in the next lecture, Sunny. Good luck to you!

Re: I hope a credit expert can help me figure this out or help me get Experian to fix this

OmarGB9 — Tue, 22 Feb 2022 13:01:41 GMT

@krit wrote:
@OmarGB9 Just curious: How come AZEO doesn't work with Chase? Thanks.

@

@krit, @EAJuggalo already explained it perfectly. Chase reports your normal statement balance, but they also report any time you zero out your balance. So that would incur the "all-zero" penalty, thus defeating the purpose of AZEO.