topic Re: Why did my score drop??? in Understanding FICO® Scoring

Why did my score drop???

Sitori — Wed, 20 Feb 2013 23:59:47 GMT

I'm confused...

I was at a 695 EQ and 700 TU in November. I opened an Amazon store card which is now at $2200 CL, a Discover $1700 CL and a Cap1 $1000 CL all around October/November of last year. I had a First Premier card since July with a $300 CL.

I didn't max any of my cards out but I put a pretty big dent in them from the holidays. I have paid much more than the balance every month, and have paid multiple times a month since December to try and get the balances lower. I've always put a couple hundred dollars on each(no lower than 100). There's a zero balance on the FP, a $250 on the Amazon, $900 on the Discover and $300 on the Cap 1.

Why would my EQ score drop 55 points????

I haven't even looked at my TU score yet but now I'm terrified.

I need to apply for Care Credit SOON!! Now I'm afraid I won't get approved, or I'll get a small CL.

Is there anyway I can get my score back up quick? I don't understand why it would drop so much when I've never been late or missed a payment and am constantly paying on all the CC's.

Any advice would be appreciated. =)

Thanks

Re: Why did my score drop???

Sitori — Thu, 21 Feb 2013 00:14:21 GMT

Sorry ...Meant to say my EQ went from a 695-640. I just got the score watch and it's showing it as a 640.

I"m so bummed. Isn't having credit supposed to help you??? When I had NOTHING my score was higher. I don't get it.

Re: Why did my score drop???

E150GT — Thu, 21 Feb 2013 00:16:45 GMT

your utilization is high. Why do you "need" to apply to care credit? Your score will rebound whent the balances are paid down more than they are.

Re: Why did my score drop???

Anonymous — Thu, 21 Feb 2013 00:21:31 GMT

The combination of the fairly new accounts and the utilization is most likely dropping your score. It is fairly well documented by experience around here that FICO scoring likes to see total utilization of less than 10%. The optimum seems to be a zero balance on all but one card and that one card reporting a balance of 1 - 9% of its credit limit. At the least you need to have more than 1/2 of your accounts reporting a zero balance for a score boost.

The good news is FICO scoring has no memory when it comes utilization so as soon as you can get the lowered / zero balances reporting the sooner you will see a score increase. You can use your cards all you want in a month. You just need to pay off the balance a day or two before the statement date and not add any new charges until after the statement date.

The other good news is Care Credit has some pretty liberal standards and you may get the credit you need anyway especially if you are applying through a provider instead of on your own.

Re: Why did my score drop???

zerobacan — Thu, 21 Feb 2013 00:27:56 GMT

@E150GT wrote:
your utilization is high. Why do you "need" to apply to care credit? Your score will rebound whent the balances are paid down more than they are.

+1 on utilization being high + as I see 3 new account compared the only 1 old you had before brought your Average of credit down too fast

Care Credit = High interests!

Re: Why did my score drop???

Sitori — Thu, 21 Feb 2013 00:48:29 GMT

So paying them down to below 10% is really the only thing that will make a change?

If I pay off the Cap1 and the Amazon and only have a balance on the Discover would that help? I dont think I'll be able to pay them all off right now and my dental work can't wait that much longer.

I was denied Care Credit back in August so I'm hoping having this credit history will make a difference but now that my scores have dropped I'm not so sure anymore.

Re: Why did my score drop???

Anonymous — Thu, 21 Feb 2013 00:55:16 GMT

I wouldn't carry a balance unless you absolutely have to. Like the others have mentioned the utilization and drop in AAOA is what is hurting you. You'll bounce back up once you pay down your credit cards.

Re: Why did my score drop???

E150GT — Thu, 21 Feb 2013 00:58:00 GMT

low balances and time will heal a score and make it better actually. lower balances will help in the short time though.

Re: Why did my score drop???

Sitori — Thu, 21 Feb 2013 01:32:57 GMT

How long do they view an account as being "new"

Re: Why did my score drop???

Sitori — Thu, 21 Feb 2013 01:41:02 GMT

I guess I did everything backwards then. I waited to apply for the care credit so that I would have a more credit history and get approved. I guess I should have applied for it when I went on my little app spree in November. Dangit

Re: Why did my score drop???

LS2982 — Thu, 21 Feb 2013 01:58:16 GMT

@zerobacan wrote:
@E150GT wrote:
your utilization is high. Why do you "need" to apply to care credit? Your score will rebound whent the balances are paid down more than they are.
+1 on utilization being high + as I see 3 new account compared the only 1 old you had before brought your Average of credit down too fast

Care Credit = High interests!

Not if you have the balance on a deffered interest plan, anything spent on that card should only be done like that to avoid interest.

Re: Why did my score drop???

Sitori — Thu, 21 Feb 2013 02:06:29 GMT

Yes...plus it really doesn't matter at this point. Interest or not, I need it.

What is hurting it the most? The UTL or the age of the accounts?

Re: Why did my score drop???

LS2982 — Thu, 21 Feb 2013 02:13:54 GMT

@Sitori wrote:
Yes...plus it really doesn't matter at this point. Interest or not, I need it.

What is hurting it the most? The UTL or the age of the accounts?

I'd say util. more than anything. Get that under 15% then go for it.

Re: Why did my score drop???

Anonymous — Thu, 21 Feb 2013 02:36:47 GMT

It takes about 6 months to establish a rebound in score after adding new accounts. I've heard Care Credit is a pretty easy card to get...I've been told they approve in the low 600's.

But having all cards paid to zero except one that has high utilization will still tank your score. For max points, all but 1 should report a zero balance and the one card that reports a balance should be around 9%.

Don't feel bad, my score has dropped from 703 to 689 (my siggy isn't updated yet). I have 8 inquiries from buying a house, leasing a new car, applying for 2 credit cards and using them to the max for new home purchases all over a 3 month period (so I am gardening right now). But I know it is going back up once I get my utilization down. The money is starting roll in starting Friday. I will get $8,000 over the next couple of weeks from my yearly bonus and I have already scheduled 2 out of 4 CC payments for this Friday and the next to get my utilization on those two cards back down to ZERO! My Best Buy card hasn't came yet in the mail so I have to wait to pay that. One of my cards is at 97%...yep it is bad. But they reported 71% to the credit bureaus as they reported right in the middle of my charging spree. So the nice thing is I will have it back down to zero before it reports again so the 97% won't actually report.

I'm the type of person that doesn't like debt. I only charge what I know I will have cash for in the near future. I don't take advantage of zero % APR offers for 18 months because I hate when my score tanks because of it and I don't like just paying a $150 per month for a year. I like my cards to be assessable to the max. Different strokes for different folks. But your score will come back up and probably be higher than it was initially given the new mix of credit. Utilization is a score killer...always keep that in mind.

Re: Why did my score drop???

Sitori — Thu, 21 Feb 2013 03:07:20 GMT

Oh wow. Thanks for the info. I had originally planned on paying them ALL off in January but now I'm fighting with my previous employer over tax issue's. I should have atleast $3000 coming in from a tax credit but they are being shady about giving me a 1099 so that I can claim it. If I had known I was getting nothing I wouldn't have even used the cards half as much as I did. The only reason I used them was so that I could charge them up and pay them down. I'm going to try and get them down as much as possible. I may have to wait a couple of months..hopefully I can hold out that long!!

Thanks again

Re: Why did my score drop???

nicholasyud — Thu, 21 Feb 2013 03:55:32 GMT

3 new account + 1 old account = Score drop
3 /4 card report balance and with high % utili. = Score drop
Paid small balance off first then let only 1 card report balance. Then do did until your balance completely gone then let only small balance report on 1 card. You should see increase on credit score.