topic Re: Credit Score Drop in Understanding FICO® Scoring

Credit Score Drop

Anonymous — Tue, 13 May 2014 20:32:39 GMT

Really bummed out to see my Exp. FICO score go from 700 in March 2014 to 565 May 2014. I have worked hard for 3 years to build my credit score preparing to get a mortgage and checked it yesterday to discover this drastic drop. I haven't been using credit cards at all and do not have any debt at all. I went from a FICO of 646 3 years ago to 700 now 565........ Just doesn't make any sense

What in the world.... When I was struggling it never went as low as 565

Re: Credit Score Drop

09Lexie — Tue, 13 May 2014 20:38:22 GMT

@Anonymous wrote:
Really bummed out to see my Exp. FICO score go from 700 in March 2014 to 565 May 2014. I have worked hard for 3 years to build my credit score preparing to get a mortgage and checked it yesterday to discover this drastic drop. I haven't been using credit cards at all and do not have any debt at all. I went from a FICO of 646 3 years ago to 700 now 565........ Just doesn't make any sense
What in the world.... When I was struggling it never went as low as 565

Just to be clear, you pulled your scores from myFICO in March and again in May -same bureau Experian and your scores dropped 135 points? Have you checked your reports for derogs? Are all your TLs reporting?

Re: Credit Score Drop

Anonymous — Tue, 13 May 2014 21:04:49 GMT

I'm not sure what TLs or derog means? Yes in March it was 700 with Experian and on May 7 it was 565. I have no revolving credit at all But I don't understand how that would drop my score so much it such a short period of time.

Re: Credit Score Drop

los_west — Tue, 13 May 2014 21:27:22 GMT

TL = Trade Lines on your credit report

Derogs = Derogatory entries (negative accounts) on your report, i.e., judgements, collections, late payments, over limits.....etc.

There should definitely be a reason for such a drastic point drop. Did an old collection account or judgement pop up all of a sudden? Are you a victim of identity theft? If I were you, I would pull all of my credit reports and check line by line to make sure everything is reporting as it should.

Re: Credit Score Drop

Anonymous — Tue, 13 May 2014 22:17:33 GMT

Recently MyFICO did their upgrade and that is when the drastic change took place. Any derogs on my report were dated back in 2010, is it possible this upgrade caused it?

Re: Credit Score Drop

09Lexie — Tue, 13 May 2014 22:19:10 GMT

@Anonymous wrote:
Recently MyFICO did their upgrade and that is when the drastic change took place. Any derogs on my report were dated back in 2010, is it possible this upgrade caused it?

The upgrade was for EQ not EX. If you are pulling EQ and do not have any revolving TLs it could be the reason.

Re: Credit Score Drop

Anonymous — Tue, 13 May 2014 22:40:02 GMT

Correction... That was an Equifax report.

So how can I improve this score? Will Experian and Transunion's report differ?

Re: Credit Score Drop

09Lexie — Wed, 14 May 2014 08:21:25 GMT

@Anonymous wrote:
Correction... That was an Equifax report.
So how can I improve this score? Will Experian and Transunion's report differ?

Sounds like you need to pull your actual CR's. You are entitled to a free copy each year from annualcreditreport .com. Depending on what items are reporting on your reports will determine if they differ. Scoring for each bureau may or may not be close based on which scoring model is used.

After you pull your reports, update this thread.

Moving to Understanding FICO Scoring

Re: Credit Score Drop

Revelate — Wed, 14 May 2014 06:18:38 GMT

@Anonymous wrote:
Correction... That was an Equifax report.
So how can I improve this score? Will Experian and Transunion's report differ?

Get a pair of credit cards (or slightly better, 3), and then follow the balance reporting advice on these forums . They'll likely be a straight boost, you may need to do secured cards at 560 depending what the rest of your file looks like.

All three reports are independent, but in general if the data is the same the scores will be similar assuming they're the same version (i.e. Experian and Equifax here at myFICO are the same version, the Transunion score is very different).

I'm pretty astonished though at a 100+ point drop for not having credit cards, I would've thought that would've been a far larger negative on the older EQ '04 version as well. I would recommend as Lexie suggests, do a careful read of the two reports and make certain theyre both the same as that differential does sound sucpect to me but it's possible since virtually nobody on these forums has zero credit cards or other revolving tradelines on their report.

Re: Credit Score Drop

BeansandRice — Thu, 15 May 2014 16:39:03 GMT

Totally feel your pain Felicity17. Checked my score and CR last week and was a 649. Got an alert about the change in scoring and now it is a 586!!! Feeling totally crushed. Acquired a new car loan last year and paid on time since. Watched my score steadily rise until this change. And I was just about to apply for a USDA home loan. I don't have any credit cards. I guess it's time to get one and hope for a bump. Unless any of you board veterans think it's a bad idea?

Re: Credit Score Drop

Revelate — Thu, 15 May 2014 16:57:29 GMT

@BeansandRice wrote:
Totally feel your pain Felicity17. Checked my score and CR last week and was a 649. Got an alert about the change in scoring and now it is a 586!!! Feeling totally crushed. Acquired a new car loan last year and paid on time since. Watched my score steadily rise until this change. And I was just about to apply for a USDA home loan. I don't have any credit cards. I guess it's time to get one and hope for a bump. Unless any of you board veterans think it's a bad idea?

Well, to be fair most mortgages underwrite on the older FICO '04 version that was previously sold here, so that drop is likely irrelevant from that perspective.

When were you thinking mortgage? If we're talking a few weeks, go apply for it now and see what the older scores were... if it comes up short, open up a credit card and cross fingers. It appears as though FICO '08 has a much higher weight on having revolving tradelines than the older models did. If you're looking at the USDA loan in six months or whatever (probably even 3 months in the no-revolving tradeline situation, should be a trivial LFE to write if the underwriters ask for it), then get a card now would be my recommendation.

Do check the report closely and see if there's anything else that's off in it compared to the last one, otherwise go for it.

Re: Credit Score Drop

BeansandRice — Thu, 15 May 2014 17:04:18 GMT

Thanks for the input Revelate. Will apply now and see what happens.

Re: Credit Score Drop

Anonymous — Tue, 27 May 2014 15:05:09 GMT

OMG I am going thru the same thing! My score went from 675 to 615 in a matter of 20 days??? I have no delinquencies, no collections, no credit cards, and have worked so hard to get my credit on track. What am I doing wrong???

Re: Credit Score Drop

Revelate — Tue, 27 May 2014 16:32:19 GMT

@Anonymous wrote:
OMG I am going thru the same thing! My score went from 675 to 615 in a matter of 20 days??? I have no delinquencies, no collections, no credit cards, and have worked so hard to get my credit on track. What am I doing wrong???

Welcome to the forums!

Two questions: first where are you getting your scores, and second, do you have a before and after report.... well that leads to a third, if you have the reports, take a look to see if there's any changes (new derogatories, new tradelines, change in balances, etc, unfortunately it's a complicated algorithm and it all matters).

I'll be the first to admit there's some black art in FICO scoring from a consumer perspective because we don't know all the details, but typically if a before and after picture is known we can likely pull something relevant out of it.

Re: Credit Score Drop

Rain77 — Tue, 27 May 2014 17:23:13 GMT

+1. Definately fine tooth your EQ report if you have a before and after. My score dropped 17pts. At first glance I couldn't figure out why. Then I took a longer look (should've seen this to begin with) but they dropped almost 20yrs of positive account history, lowering my AAoA. Once I had them add the positive accounts back, the points came with it, exact amount lost.

Re: Credit Score Drop

Anonymous — Tue, 27 May 2014 20:14:23 GMT

I recently obtained a $317,000 mortgage this March but nothing else new??? Is this hurting my score since I don't have any credit cards to balance things out? I DEF won't qualify for a credit card now with a score of 615...

Re: Credit Score Drop

Anonymous — Tue, 27 May 2014 20:18:54 GMT

Thanks for replying, I got that score from my ScoreWatch subscription. I will log in now to view all thre

@Revelate wrote:
@Anonymous wrote:
OMG I am going thru the same thing! My score went from 675 to 615 in a matter of 20 days??? I have no delinquencies, no collections, no credit cards, and have worked so hard to get my credit on track. What am I doing wrong???

Welcome to the forums!

Two questions: first where are you getting your scores, and second, do you have a before and after report.... well that leads to a third, if you have the reports, take a look to see if there's any changes (new derogatories, new tradelines, change in balances, etc, unfortunately it's a complicated algorithm and it all matters).

I'll be the first to admit there's some black art in FICO scoring from a consumer perspective because we don't know all the details, but typically if a before and after picture is known we can likely pull something relevant out of it.

Thanks for replying, I got that score from my ScoreWatch subscription. I will log in now to view all three scores but nothing has.changed from the last report I received.

P.S. I am SO glad I discovered this forum, everyone is so helpful and informative

Re: Credit Score Drop

Revelate — Wed, 28 May 2014 03:57:07 GMT

@Anonymous wrote:
I recently obtained a $317,000 mortgage this March but nothing else new??? Is this hurting my score since I don't have any credit cards to balance things out? I DEF won't qualify for a credit card now with a score of 615...

Sounds like you got converted and missed the memo (or more likely FICO didn't send you one).

The new version FICO '08 penalizes people without revolving tradelines HARSHLY (to the tune of 50-100 points in all reported cases I've seen). If this applies to you as it sounds like it does, open a pair of small credit cards. Go check the pre-qual for Capital One and see if you qualify for an unsecured card, if not what I'd do is open up a $300 BOFA secured card (which is by far the best starter card for a lot of reasons) and then likely a $250 one at SDFCU or $99 from Cap One (no AF on the SDFCU one) and just get the tradelines on your report as you'll get a straight boost now and your score will likely be back up to what it was previously within a year or perhaps even six months.

We don't have a lot of experience with FICO '08 and people without credit cards: the heavy social people tend to wind up hanging out in CC's anyway so have plenty of cards, and we only just got the transition for Scorewatch which has brought a lot of SW subscribers out complaining about the change with large drops, and many of them have little to no open revolving tradelines.

Easy yet annoying to fix, open up a couple of silly credit cards, use them sporadically (or maybe for everything like I did after my cash-based existance) and go on with life. I think it's a little awkward, but we're slaves to the algorithm on some things.

ETA: I've always suggested that people have a solid mix of tradelines between revolving and installment ones, usually that advice was given to people with credit cards and no installment history, but it's come home hard for people who didn't have credit cards with this transition.

Re: Credit Score Drop

tld1104 — Sat, 31 May 2014 02:28:21 GMT

I got the email and a scorewatch alert this week. I lost 32 points on EQ...I also don't have any revolving accounts. I just got my first statement from my new Capital One secured card. I hope they start reporting soon and I hope it helps!

Re: Credit Score Drop

Revelate — Sat, 31 May 2014 05:52:16 GMT

@tld1104 wrote:
I got the email and a scorewatch alert this week. I lost 32 points on EQ...I also don't have any revolving accounts. I just got my first statement from my new Capital One secured card. I hope they start reporting soon and I hope it helps!

IF you would, would you let us know what the score change is when it does start reporting? Would be greatly appreciated!