topic Re: My FICO 8 dropped by 9 points overnight in Understanding FICO® Scoring

My FICO 8 dropped by 9 points overnight

RaeRae1226 — Thu, 12 Dec 2024 15:48:30 GMT

Hi everyone,

I'm at a loss. Can someone help me better understand why my FICO 8 on Experian would have dropped overnight?

My status PRIOR to my score dropping:

- 8 Open accounts

- 3 New accounts

- 10 - hard inquiries (I know I know...)

- Utilization 14%

- No recently closed accounts

- ZERO collections and/or judgments

When I click on today's score to see "what changed" there are two reasons given verbatim:

Change #1

Your Total Balance on all accounts has decreased:

Your balance has decreased by $1,651 since your previous report not including derogatory or collection accounts (I don't have any btw). You may. not see a score change, since balance is associated with other factors that affect your score

Change #2

Your credit utilization decreased by 10%

Your credit utilization went from 14% to 4% which usually means you paid down your balance or increased your credit limit. Generally the lower. your utilization the better-provided that you regularly use your credit cards.

Additional context:

- I'm very well aware that it's better to carry a small balance from month to month vs a 0% balance, so I make sure my utilization is NEVER at 0%.

- I purposely use all my cards regularly per their category and typically pay them off ASAP. I treat my credit cards like bank cards. If I don't have the money I don't buy it.

- My Experian FICO score is updated daily because I pay for the premium subscription (I think it's worth it). This is important because there are factors that in general could potentially drop the score like my hard inquiries, but those factors were calculated in far before today's score change and were explained on my report when it happened. Coincidently my myFICO account doesn't update daily and only shows my previous score from 12/6/24.

- For what it's worth, my Creditwise score jumped by 50 points with the same exact changes today. I know Creditwise uses vantagescore which is a different (and useless) calculation, but I think it could be worth mentioning.

Honestly, I'm at a loss. I follow my credit score, cards, points, cash back like a hawk and although I still have a ton to learn I feel like I've done everything right per my situation.

If someone with more knowledge than me could help me better understand I'd greatly appreciate it.
Thanks in advance!

Re: My FICO 8 dropped by 9 points overnight

JoeRockhead — Thu, 12 Dec 2024 16:39:13 GMT

@RaeRae1226 wrote:
Hi everyone,
I'm at a loss. Can someone help me better understand why my FICO 8 on Experian would have dropped overnight?

My status PRIOR to my score dropping:
- 8 Open accounts What are the ages of these accounts, AAoA and AoOA?
- 3 New accounts When were they approved, how old are they?
- 10 - hard inquiries (I know I know...)
- Utilization 14% How many of your revolving accounts posted a balance?
- No recently closed accounts
- ZERO collections and/or judgments
When I click on today's score to see "what changed" there are two reasons given verbatim:
Change #1
Your Total Balance on all accounts has decreased:
Your balance has decreased by $1,651 since your previous report not including derogatory or collection accounts (I don't have any btw). You may. not see a score change, since balance is associated with other factors that affect your score

Change #2
Your credit utilization decreased by 10%
Your credit utilization went from 14% to 4% which usually means you paid down your balance or increased your credit limit. Generally the lower. your utilization the better-provided that you regularly use your credit cards.

Additional context:

- I'm very well aware that it's better to carry a small balance from month to month vs a 0% balance, so I make sure my utilization is NEVER at 0%.
- I purposely use all my cards regularly per their category and typically pay them off ASAP. I treat my credit cards like bank cards. If I don't have the money I don't buy it.
- My Experian FICO score is updated daily because I pay for the premium subscription (I think it's worth it). This is important because there are factors that in general could potentially drop the score like my hard inquiries, but those factors were calculated in far before today's score change and were explained on my report when it happened. Coincidently my myFICO account doesn't update daily and only shows my previous score from 12/6/24.
- For what it's worth, my Creditwise score jumped by 50 points with the same exact changes today. I know Creditwise uses vantagescore which is a different (and useless) calculation, but I think it could be worth mentioning.

Honestly, I'm at a loss. I follow my credit score, cards, points, cash back like a hawk and although I still have a ton to learn I feel like I've done everything right per my situation.

If someone with more knowledge than me could help me better understand I'd greatly appreciate it.
Thanks in advance!

Did any old accounts/closed loans fall off your reports? It's also possible you may have moved to a different (mature) scorecard due to crossing certain ageing thresholds, which could temporarily ding your score slightly. 9 points is a slight dip which should recover in the near future.

Re: My FICO 8 dropped by 9 points overnight

RaeRae1226 — Thu, 12 Dec 2024 17:34:35 GMT

So it's a big dip for me because it brought my score from a "good" credit score" to a "fair" credit score. None of my closed accounts have fallen off my report. They're all still listed there and are listed as paid. I'm pretty sure that my average of my accounts has decreased recently because I got new three cards last month. But those new card changes were already reported last month and were reflected in my credit score when they were reported.

Age of oldest account is listed as 9 years 6 months but this is actually inaccurate because I'm an authorized user on one of my mother's cards that was opened in 2004 and that card is reflected on both TU and EQ but not Experian.

Average age of accounts is 2 years and 2 months which is also skewed because of what I mentioned above.

That said, this wasn't listed in today's "what changed" alert. These were reported last month as well and my score updated accordingly.

Re: My FICO 8 dropped by 9 points overnight

RaeRae1226 — Thu, 12 Dec 2024 17:39:55 GMT

@JoeRockhead So it's a big dip for me because it brought my score from a "good" credit score" to a "fair" credit score. None of my closed accounts have fallen off my report. They're all still listed there and are listed as paid. I'm pretty sure that my average of my accounts has decreased recently because I got new three cards last month. But those new card changes were already reported last month and were reflected in my credit score when they were reported.

Average age of accounts is 2 years and 2 months which is also skewed because of what I mentioned above.

That said, this wasn't listed in today's "what changed" alert. These were reported last month as well and my score updated accordingly.

Re: My FICO 8 dropped by 9 points overnight

JoeRockhead — Thu, 12 Dec 2024 18:11:29 GMT

@RaeRae1226 What's the utilization % on the card with the highest reported balance? How many of the total accounts (including the AU card) are reporting balances?

Re: My FICO 8 dropped by 9 points overnight

RaeRae1226 — Thu, 12 Dec 2024 19:13:58 GMT

@JoeRockhead

Coincidently the only card with a balance left is my mother's card that has the highest credit limit out of all the cards that I have. I paid $1000 on it last month and it's partly why my utilization went from 14% to 4%. The utilization on her card now is 14.5%. I have 8 cards total and two of those are AU cards. The only other card that has a balance that's being reported right now is my Capital One card with a balance of $11.

Re: My FICO 8 dropped by 9 points overnight

Patient957 — Thu, 12 Dec 2024 19:41:33 GMT

@RaeRae1226 wrote:
@JoeRockhead

Coincidently the only card with a balance left is my mother's card that has the highest credit limit out of all the cards that I have. I paid $1000 on it last month and it's partly why my utilization went from 14% to 4%. The utilization on her card now is 14.5%. I have 8 cards total and two of those are AU cards. The only other card that has a balance that's being reported right now is my Capital One card with a balance of $11.

It's a little unclear which cards you have reporting balances and which are AU accounts.

If your only card(s) currently reporting a balance are AU cards, then you would expect to have an all zero penalty.

It would help if you could list your cards and note which are AU and the date opened for the three new ones. EDIT: And the reporting balance for each!

Re: My FICO 8 dropped by 9 points overnight

RaeRae1226 — Thu, 12 Dec 2024 19:48:06 GMT

@Patient957 With the exception of my Capital One card with $11 it's only my AU card that is reporting a balance.

I'm confused though, my AU card definitely contributes towards my utilization and has always been listed when I check what cards are reporting balances.

if it's counted towards the my utilization why wouldn't it count towards not having a 0% balance?

Re: My FICO 8 dropped by 9 points overnight

RaeRae1226 — Thu, 12 Dec 2024 19:52:39 GMT

@Patient957

Amex Gold (mine) $0

Jetblue $0

Capital One Quicksilver $11

Chase Slate Edge (hugely underrated) $0

BOA Uimted Cash Rewards $0

PayPal Mastercard $0

Amex Everyday AU $468

Kohl's AU &0

Re: My FICO 8 dropped by 9 points overnight

NoHardLimits — Thu, 12 Dec 2024 19:52:06 GMT

@RaeRae1226 wrote:
@Patient957 With the exception of my Capital One card with $11 it's only my AU card that is reporting a balance.

I'm confused though, my AU card definitely contributes towards my utilization and has always been listed when I check what cards are reporting balances.

if it's counted towards the my utilization why wouldn't it count towards not having a 0% balance?

Primary card accounts and authorized user accounts are counted separately in number of revolving accounts metrics. You can have an all zero penalty on your own primary accounts and a separate all zero penalty on your AU accounts.

Re: My FICO 8 dropped by 9 points overnight

Patient957 — Thu, 12 Dec 2024 19:54:40 GMT

@RaeRae1226 wrote:
@Patient957 With the exception of my Capital One card with $11 it's only my AU card that is reporting a balance.

I'm confused though, my AU card definitely contributes towards my utilization and has always been listed when I check what cards are reporting balances.

if it's counted towards the my utilization why wouldn't it count towards not having a 0% balance?

The all zero penalty applies separately to your personal accounts vs AU accounts.

I think you're saying all your non-AU accounts are posting zero balanes. If so, this is your reason. Let a small balance report on one of your non-AU cards and you should get your points back.

Re: My FICO 8 dropped by 9 points overnight

RaeRae1226 — Thu, 12 Dec 2024 19:54:58 GMT

@NoHardLimits I see. This must be the reason. I guess I made a bad strategic decision when deciding which account not to fully pay off (I'm paying my moms card but it's mostly her debt).

I guess I'll make sure one of my own cards reports this month.

Re: My FICO 8 dropped by 9 points overnight

RaeRae1226 — Thu, 12 Dec 2024 19:56:09 GMT

@Patient957

Pretty much. My Capital One is posting $11 but that's it. Thank you for the insight.

Re: My FICO 8 dropped by 9 points overnight

NoHardLimits — Thu, 12 Dec 2024 19:56:46 GMT

@RaeRae1226 wrote:
@NoHardLimits I see. This must be the reason. I guess I made a bad strategic decision when deciding which account not to fully pay off (I'm paying my moms card but it's mostly her debt).

I guess I'll make sure one of my own cards reports this month.

Make sure one primary account AND one AU account posts each month to avoid both penalties.

Re: My FICO 8 dropped by 9 points overnight

JoeRockhead — Thu, 12 Dec 2024 19:59:24 GMT

@RaeRae1226 If the $11 balance on your Cap One is less than .5% that could be a factor combined with the other accounts being zeroed out. If it was a true all zero penalty, the score hit is generally more significant (20+ points). Even if the Capital One balance represents a greater percentage than .5%, what's more likely is Experian gave a penalty being all your other primary cards (AU not included) combined being zeroed out led to a slight penalty for inactivity. I know it sounds silly but nothing else in the information you provided points to anything else.

If you're going to leave a small balance on 1, or 2 cards, at least try to make them at, or near the 1% mark to avoid anything less getting rounded down for scoring purposes. The good news is this just seems to be a utilization thing. If you allow a slightly higher balance report for the next billing cycle, you should see your points come back.

Re: My FICO 8 dropped by 9 points overnight

RaeRae1226 — Thu, 12 Dec 2024 21:35:54 GMT

@JoeRockhead @NoHardLimits

Thank you both for your insight. I'll make sure to have something reported on my own cards going forward. I really appreciate your help.