topic Re: FICO dropped 50 points after IMPROVING mortgage history in Understanding FICO® Scoring

FICO dropped 50 points after IMPROVING mortgage history

sam818 — Thu, 26 Feb 2015 15:37:43 GMT

Mortgage went from 90 days late to 60 days late (i.e. improved) but scores dropped about 50 points across the board.
Planning for it to improve to 30 days late this month so will the score drop again?
This seems counter intuitive.

Has anyone else seen this ...and what gives.....?
ALSO: drastically reduced Credit Card utilization..... 90% down to 45% and each time score DROPS with that also...or does not move at all.

Any thoughts?

Re: FICO dropped 50 points after IMPROVING mortgage history

Revelate — Thu, 26 Feb 2015 16:25:40 GMT

To make certain I'm understanding this:

Your tradeline looks something like this: OK OK 30 60 90 60 ?

That's still a delinquent account and will continue to increasingly negatively impact your score until it's brought current after which the damage is done and you can keep moving forward.

As for the credit card debt, hard to say though others have reported it too: possible there are some triggers in FICO 8 we're not aware of from prior versions when it comes to suddenly paying credit card debt or it could be something else... regardless paying off CC's are absolutely a good thing, scores dropping for that are something of a red herring when we're talking long term where everyone should be focused with incredibly few exceptions.

Are you getting your scores from here or somewhere else?

Re: FICO dropped 50 points after IMPROVING mortgage history

sam818 — Thu, 26 Feb 2015 16:59:32 GMT

@Revelate wrote:
To make certain I'm understanding this:

Your tradeline looks something like this: OK OK 30 60 90 60 ?

That's still a delinquent account and will continue to increasingly negatively impact your score until it's brought current after which the damage is done and you can keep moving forward.

As for the credit card debt, hard to say though others have reported it too: possible there are some triggers in FICO 8 we're not aware of from prior versions when it comes to suddenly paying credit card debt or it could be something else... regardless paying off CC's are absolutely a good thing, scores dropping for that are something of a red herring when we're talking long term where everyone should be focused with incredibly few exceptions.

Are you getting your scores from here or somewhere else?

Scores are Fico8 from here.

Correct with regard to the mortgage trade line.

I am confused however that an "improvement" from 90 down to 60 would have a new significant "negative" score effect. It had been 90 for quite a few months. The 50 point reduction only appeared when the payment "improved" and it’s hard to imagine is was related to a series of 90 day lates from many months prior. Next month it will be down to 30 late. I wonder if it went back up to 90 would that have any effect. Based on your comment, it appears that 30, 60 or 90 would have the same score impact. Am I correct? Is it possible that the improvement in "lateness" falls into the same category as an old credit line being re-aged...i.e. waking a sleeping dog?

With regard to the CC utilization: I have 3 open. One of the cards is a low limit ($1000) store card with an $800 balance (80% Utilization), however the two other cards with $3500 and $8500 limits have much lower balances in aggregate and bring the overall utilization down into the 40% range. Is it possible that one card with a higher utilization could have an impact, rather than the aggregate. As recently as 4 months ago, utilization was as high as 90% so I was expecting an improvemnet when it was down into the 40's, even though it's not the ideal <30% range.

Overall, this is a good example of how intelligent strategic planning is still a hit or miss adventure.

The notion that reducing utilization AND improving a payment is turned on its head.

Re: FICO dropped 50 points after IMPROVING mortgage history

ctxinfl — Thu, 26 Feb 2015 20:53:50 GMT

I'm rather certain there is a RAND() function somewhere in the MyFico scoring "formula." I dropped my credit card utilization from 60% to 2% utilization this month and saw zero change. Last month my score dropped by eight points claiming I had too many accounts with balances when the number of accounts hasn't changed in a year.

Re: FICO dropped 50 points after IMPROVING mortgage history

Anonymous — Fri, 27 Feb 2015 17:53:06 GMT

I paid off 2 credit cards, one card showed 29% utilization, the other was 12%. I have one remaining card with an 8% utilization. I LOST 21 POINTS (EX and Tu, 24 points with EQ)!!! I am not convinced 1 card with less than 10% utilization is the way to get the best scores. That may have been the case at some point but too many are taking hits to their scores for paying off balances now. Another thought I have on that is, those with lower AAoA need to show more utilization and payments. They are establishing they can manage credit. When they pay it off, the scoring models penalize them. I am testing that theory now that I took a huge hit.

Re: FICO dropped 50 points after IMPROVING mortgage history

NRB525 — Sat, 28 Feb 2015 04:34:39 GMT

@sam818 wrote:
@Revelate wrote:
To make certain I'm understanding this:

Your tradeline looks something like this: OK OK 30 60 90 60 ?

That's still a delinquent account and will continue to increasingly negatively impact your score until it's brought current after which the damage is done and you can keep moving forward.

As for the credit card debt, hard to say though others have reported it too: possible there are some triggers in FICO 8 we're not aware of from prior versions when it comes to suddenly paying credit card debt or it could be something else... regardless paying off CC's are absolutely a good thing, scores dropping for that are something of a red herring when we're talking long term where everyone should be focused with incredibly few exceptions.

Are you getting your scores from here or somewhere else?
Scores are Fico8 from here.
Correct with regard to the mortgage trade line.
I am confused however that an "improvement" from 90 down to 60 would have a new significant "negative" score effect. It had been 90 for quite a few months. The 50 point reduction only appeared when the payment "improved" and it’s hard to imagine is was related to a series of 90 day lates from many months prior. Next month it will be down to 30 late. I wonder if it went back up to 90 would that have any effect. Based on your comment, it appears that 30, 60 or 90 would have the same score impact. Am I correct? Is it possible that the improvement in "lateness" falls into the same category as an old credit line being re-aged...i.e. waking a sleeping dog?

With regard to the CC utilization: I have 3 open. One of the cards is a low limit ($1000) store card with an $800 balance (80% Utilization), however the two other cards with $3500 and $8500 limits have much lower balances in aggregate and bring the overall utilization down into the 40% range. Is it possible that one card with a higher utilization could have an impact, rather than the aggregate. As recently as 4 months ago, utilization was as high as 90% so I was expecting an improvemnet when it was down into the 40's, even though it's not the ideal <30% range.
Overall, this is a good example of how intelligent strategic planning is still a hit or miss adventure.
The notion that reducing utilization AND improving a payment is turned on its head.

what are your scores?

Is the timeline that revelate proposed correct? Paying 30 days late, (or not paying for two months so it's 60 days late?), then missing three monthly payments so it's 90 days late? Or are the payments going back to the previous month so you have a rolling 30 day late situation, until it moved to 60 days late?

With any lates on your mortgage I would expect a rather harsh drop in the scores. Did the lender just not report the lates until recently? I'm confused. Not enough information to compute. Did you pull an actual credit report to see that they reported a 90 day late? or that is your calculation? I'm confused....

Re: FICO dropped 50 points after IMPROVING mortgage history

sam818 — Sat, 28 Feb 2015 05:06:19 GMT

@NRB525 wrote:
@sam818 wrote:
@Revelate wrote:
To make certain I'm understanding this:
G
Your tradeline looks something like this: OK OK 30 60 90 60 ?

That's still a delinquent account and will continue to increasingly negatively impact your score until it's brought current after which the damage is done and you can keep moving forward.

As for the credit card debt, hard to say though others have reported it too: possible there are some triggers in FICO 8 we're not aware of from prior versions when it comes to suddenly paying credit card debt or it could be something else... regardless paying off CC's are absolutely a good thing, scores dropping for that are something of a red herring when we're talking long term where everyone should be focused with incredibly few exceptions.

Are you getting your scores from here or somewhere else?
Scores are Fico8 from here.
Correct with regard to the mortgage trade line.
I am confused however that an "improvement" from 90 down to 60 would have a new significant "negative" score effect. It had been 90 for quite a few months. The 50 point reduction only appeared when the payment "improved" and it’s hard to imagine is was related to a series of 90 day lates from many months prior. Next month it will be down to 30 late. I wonder if it went back up to 90 would that have any effect. Based on your comment, it appears that 30, 60 or 90 would have the same score impact. Am I correct? Is it possible that the improvement in "lateness" falls into the same category as an old credit line being re-aged...i.e. waking a sleeping dog?

With regard to the CC utilization: I have 3 open. One of the cards is a low limit ($1000) store card with an $800 balance (80% Utilization), however the two other cards with $3500 and $8500 limits have much lower balances in aggregate and bring the overall utilization down into the 40% range. Is it possible that one card with a higher utilization could have an impact, rather than the aggregate. As recently as 4 months ago, utilization was as high as 90% so I was expecting an improvemnet when it was down into the 40's, even though it's not the ideal <30% range.
Overall, this is a good example of how intelligent strategic planning is still a hit or miss adventure.
The notion that reducing utilization AND improving a payment is turned on its head.
what are your scores?
Is the timeline that revelate proposed correct? Paying 30 days late, (or not paying for two months so it's 60 days late?), then missing three monthly payments so it's 90 days late? Or are the payments going back to the previous month so you have a rolling 30 day late situation, until it moved to 60 days late?

With any lates on your mortgage I would expect a rather harsh drop in the scores. Did the lender just not report the lates until recently? I'm confused. Not enough information to compute. Did you pull an actual credit report to see that they reported a 90 day late? or that is your calculation? I'm confused....

@NRB525 wrote:
r
@sam818 wrote:
rolling 90's with a 590++ from myfico v8 here. So now it's reporting 60. That's why I'm surprised at the 50 point drop which appears to be based soley on the mortgage since the 3 CC trade lines have all dropped to 40% utilization in the same 30 day period.
Makes me wonder if it would be better to reduce tge mtg to 30 or the CC utilization to less than 30%. So far both improvements have lead to score reductions

@Revelate wrote:

To make certain I'm understanding this:

Your tradeline looks something like this: OK OK 30 60 90 60 ?

That's still a delinquent account and will continue to increasingly negatively impact your score until it's brought current after which the damage is done and you can keep moving forward.

Are you getting your scores from here or somewhere else?

Scores are Fico8 from here.

Correct with regard to the mortgage trade line.

Overall, this is a good example of how intelligent strategic planning is still a hit or miss adventure.

The notion that reducing utilization AND improving a payment is turned on its head.

what are your scores?
Is the timeline that revelate proposed correct? Paying 30 days late, (or not paying for two months so it's 60 days late?), then missing three monthly payments so it's 90 days late? Or are the payments going back to the previous month so you have a rolling 30 day late situation, until it moved to 60 days late?
With any lates on your mortgage I would expect a rather harsh drop in the scores. Did the lender just not report the lates until recently? I'm confused. Not enough information to compute. Did you pull an actual credit report to see that they reported a 90 day late? or that is your calculation? I'm confused....

Re: FICO dropped 50 points after IMPROVING mortgage history

sam818 — Sat, 28 Feb 2015 05:07:30 GMT

NRB525 wrote:
r
sam818 wrote:
rolling 90's with a 590++ from myfico v8 here. So now it's reporting 60. That's why I'm surprised at the 50 point drop which appears to be based soley on the mortgage since the 3 CC trade lines have all dropped to 40% utilization in the same 30 day period.
Makes me wonder if it would be better to reduce tge mtg to 30 or the CC utilization to less than 30%. So far both improvements have lead to score reductions

Re: FICO dropped 50 points after IMPROVING mortgage history

Anonymous — Sat, 28 Feb 2015 05:31:25 GMT

I don't understand it either! I went from 64% utilization to 46% and my score dropped 27 points. One card only had a $75 balance and I paid it off in full. My score then dropped 12 points. What the hell? Then I paid down a balance on another card by only $26 extra dollars, and my score dropped another 7 points. I worked on my credit since last August finally getting my score from 549 to 645 for Experian, so eventually once I got my score closer to 700, I could qualify for a decent loan. Then each time I paid a little more on my balances, I would get an alert that there was a balance decrease, but it will show my score dropping. Now it is now back to 599. I just want to cry. Everyone keeps saying to pay down the balances so the utilization will be low, therefore it will increase your score. But, instead it did the opposite. My score was higher when my utilation was higher. Now I feel like I wasted all of these months for nothing.

Re: FICO dropped 50 points after IMPROVING mortgage history

Revelate — Sun, 01 Mar 2015 16:19:59 GMT

@sam818 wrote:
@NRB525 wrote:
r
@sam818 wrote:
rolling 90's with a 590++ from myfico v8 here. So now it's reporting 60. That's why I'm surprised at the 50 point drop which appears to be based soley on the mortgage since the 3 CC trade lines have all dropped to 40% utilization in the same 30 day period.
Makes me wonder if it would be better to reduce tge mtg to 30 or the CC utilization to less than 30%. So far both improvements have lead to score reductions

I would suggest that you not worry about the score in the short term when you're behind in your financial obligations (at least in this case).

Get your mortgage current ASAP; then worry about the rest of your debt or anything else with regards to credit. I do agree with you that it's the mortgage line which is the albatross on your credit report and score... but until it's current, score may well continue to drop.

Re: FICO dropped 50 points after IMPROVING mortgage history

NRB525 — Sun, 01 Mar 2015 17:06:56 GMT

@Revelate wrote:
@sam818 wrote:
@NRB525 wrote:
r
@sam818 wrote:
rolling 90's with a 590++ from myfico v8 here. So now it's reporting 60. That's why I'm surprised at the 50 point drop which appears to be based soley on the mortgage since the 3 CC trade lines have all dropped to 40% utilization in the same 30 day period.
Makes me wonder if it would be better to reduce tge mtg to 30 or the CC utilization to less than 30%. So far both improvements have lead to score reductions
I would suggest that you not worry about the score in the short term when you're behind in your financial obligations (at least in this case).

Get your mortgage current ASAP; then worry about the rest of your debt or anything else with regards to credit. I do agree with you that it's the mortgage line which is the albatross on your credit report and score... but until it's current, score may well continue to drop.

OP, your mortgage lates are quite simply baddies. You can't analyze any FICO score changes or speculate on how it affects scores when that is going on.

Re: FICO dropped 50 points after IMPROVING mortgage history

NRB525 — Sun, 01 Mar 2015 17:09:09 GMT

@Anonymous wrote:
I don't understand it either! I went from 64% utilization to 46% and my score dropped 27 points. One card only had a $75 balance and I paid it off in full. My score then dropped 12 points. What the hell? Then I paid down a balance on another card by only $26 extra dollars, and my score dropped another 7 points. I worked on my credit since last August finally getting my score from 549 to 645 for Experian, so eventually once I got my score closer to 700, I could qualify for a decent loan. Then each time I paid a little more on my balances, I would get an alert that there was a balance decrease, but it will show my score dropping. Now it is now back to 599. I just want to cry. Everyone keeps saying to pay down the balances so the utilization will be low, therefore it will increase your score. But, instead it did the opposite. My score was higher when my utilation was higher. Now I feel like I wasted all of these months for nothing.

Sorry to hear the concerns, but really, you are better served by opening your own thread. This thread includes late mortgage payments as a driver.

I'm guessing that late mortgage payments are not in your mix of issues?