topic Re: How can a great score go down without reason? in General Credit Topics

How can a great score go down without reason?

Anonymous — Mon, 17 Nov 2008 09:13:10 GMT

Hello FICO Folks:

I hope the weekend went well for all. Can you answer a concern I have please. My credit score in October 2008 was 830. The November score is 817. How could a score decrease when I have nothing that changed in the credit profile. I have never been late for a payment, pay in full every month, and my monthly credit card bills range from 20.00 to 300.00 but are never fianced.

What did I do wrong? I had hoped that using credit cards (2 total) smartly and paying in full, never making a late payment to anyone would be the best way to either go up all the time or at least be stable. My car payment hasn't changed. I rent and do not own property.

Thanks for your help, Ralph

Re: How can a great score go down without reason?

Anonymous — Mon, 17 Nov 2008 10:06:50 GMT

In 2007, my Experian score remained unchanged at 839 for most of that year:

In January of this year, I pulled my scores and my Experian score dropped to 831. What was puzzling was that my amount of revolving debt had also decreased.

I discussed this with some of the moderators, and we could only conclude that scores do fluctuate from time to time, without any apparent reason.

I know it can be kind of depressing!

Re: How can a great score go down without reason?

MidnightVoice — Mon, 17 Nov 2008 14:39:25 GMT

My TU score dropped from 787 to 757 with no reason. It happens

Re: How can a great score go down without reason?

Anonymous — Mon, 17 Nov 2008 15:32:52 GMT

Hi Psychic: Thanks for the reply. There has to be a reason (even if it is without logic) that the score would decrease. They have to have a basis for their data. Even if scientifically flawed, something triggers an upswing or a down in their minds.

I'm glad your score is superlative! Enjoy the day, RT

Re: How can a great score go down without reason?

Anonymous — Mon, 17 Nov 2008 15:48:17 GMT

With such a small change, check your util. What was it on the October report? What was it on the November report?

Re: How can a great score go down without reason?

Anonymous — Mon, 17 Nov 2008 16:55:12 GMT

@Anonymous wrote:
Hi Psychic: Thanks for the reply. There has to be a reason (even if it is without logic) that the score would decrease. They have to have a basis for their data. Even if scientifically flawed, something triggers an upswing or a down in their minds.

That's what I've always thought. However, I have yet to figure out why this happened!

Re: How can a great score go down without reason?

Anonymous — Mon, 17 Nov 2008 17:35:07 GMT

pay in full every month, and my monthly credit card bills range from 20.00 to 300.00 but are never fianced.

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I think it is because of the $20 to $300 difference. I have about a 10 point difference on my score when my balance hits that amount.........either way it is still 1% utility for me, but I have seen it fluctuate that many points before.

Re: How can a great score go down without reason?

Lel — Mon, 17 Nov 2008 18:05:58 GMT

@Anonymous wrote:
Hello FICO Folks:

I hope the weekend went well for all. Can you answer a concern I have please. My credit score in October 2008 was 830. The November score is 817. How could a score decrease when I have nothing that changed in the credit profile. I have never been late for a payment, pay in full every month, and my monthly credit card bills range from 20.00 to 300.00 but are never fianced.

What did I do wrong? I had hoped that using credit cards (2 total) smartly and paying in full, never making a late payment to anyone would be the best way to either go up all the time or at least be stable. My car payment hasn't changed. I rent and do not own property.

Thanks for your help, Ralph

The very high FICO scores are quite sensitive to even minor fluctuations in one's credit profile. The bottom line is that you have an outstanding score, regardless of whether it is 817 or 830.

The most likely explanation in your case is that the balance reported by your credit cards was not exactly the same from October to November. Even though your utilization percentage is still very low, an increase in balance can still have a slightly negative effect on your score.

Don't sweat it. This is not a concern. With a score above 800, you'll get the best rates on any loan that you apply for. The only thing that gets hurt is your FICO pride . I know the feeling!

Re: How can a great score go down without reason?

Anonymous — Mon, 17 Nov 2008 20:31:16 GMT

You'd think with a score of 800+ you wouldn't care about a few points.

Re: How can a great score go down without reason?

Anonymous — Mon, 17 Nov 2008 20:31:33 GMT

500.

Re: How can a great score go down without reason?

Anonymous — Tue, 18 Nov 2008 16:03:18 GMT

Hi Mel/Lel I am sending 1 reply because I have had trouble with the site timing out when I attempt to post/reply the past 24 hours.

Thank you both for great information. If it is true that even with gret credit and a good limit on one card (15,000 +) that a balance for 30 days of 300.00 that is paid in full is considered worse than 20.00, it seemingly defeats the credit card company wish that people use the card more. Wouldn't the best formula be that if you spend 1 dollar or 100 but pay off every bit and on time you wouldn't have to worry about a flux in the score? What would happen if somebody put a down payment on a car or a ring for a girlfriend?

Is the lesson to be learned that people that pay off each month 100 percent of the balance and don't fiance should use a bank debit card? This way it comes out of the account and won't change the score.

May you and everyone kind enough to answer the post have a great day and fantastic credit. CP

Re: How can a great score go down without reason?

Anonymous — Tue, 18 Nov 2008 16:31:35 GMT

@Anonymous wrote:
Hi Mel/Lel I am sending 1 reply because I have had trouble with the site timing out when I attempt to post/reply the past 24 hours.

Thank you both for great information. If it is true that even with gret credit and a good limit on one card (15,000 +) that a balance for 30 days of 300.00 that is paid in full is considered worse than 20.00, it seemingly defeats the credit card company wish that people use the card more. Wouldn't the best formula be that if you spend 1 dollar or 100 but pay off every bit and on time you wouldn't have to worry about a flux in the score? What would happen if somebody put a down payment on a car or a ring for a girlfriend?

Is the lesson to be learned that people that pay off each month 100 percent of the balance and don't fiance should use a bank debit card? This way it comes out of the account and won't change the score.

My score dropped when my amount of revolving debt decreased. That is why I don't necessarily attribute your score decrease to an increase in revolving balance.

Re: How can a great score go down without reason?

Lel — Tue, 18 Nov 2008 21:18:52 GMT

@Anonymous wrote:
Hi Mel/Lel I am sending 1 reply because I have had trouble with the site timing out when I attempt to post/reply the past 24 hours.

Thank you both for great information. If it is true that even with gret credit and a good limit on one card (15,000 +) that a balance for 30 days of 300.00 that is paid in full is considered worse than 20.00, it seemingly defeats the credit card company wish that people use the card more. Wouldn't the best formula be that if you spend 1 dollar or 100 but pay off every bit and on time you wouldn't have to worry about a flux in the score? What would happen if somebody put a down payment on a car or a ring for a girlfriend?

Is the lesson to be learned that people that pay off each month 100 percent of the balance and don't fiance should use a bank debit card? This way it comes out of the account and won't change the score.

May you and everyone kind enough to answer the post have a great day and fantastic credit. CP

Here's the thing: for the most part, the credit card companies don't care what your credit score is once they've issued you a credit card. Once they've determined that you're an appropriate risk for them, then they'd be happy to have you carry a huge balance from month to month, regardless of how it might damage your score. Yes, they do check your credit from time to time to reassess their risk - some CCCs are decreasing credit lines in this time of economic uncertainty - but they are also looking to see if they can safely increase your credit limit with the hope that you will use their card more and increase their revenue from interest charges or fees from the businesses that you patronize.

With regard to the debit card question, don't do it. You don't have the same protections that you have with a credit card. If someone steals your credit card and buys $10,000 worth of stereo equipment, you're not responsible. If someone steals your debit card and takes $2000 out of your account, it is much harder to recover.

Re: How can a great score go down without reason?

Anonymous — Wed, 19 Nov 2008 06:28:39 GMT

Hi again Lel: Thank you for such articulate information. Please understand I am very grateful for my score and know how fortunate I am not to have debt. I am always curious to learn things outside my avenue of expertise. Even if the answer is not what I hope, it gives me an insight. Not having knowledge of the Credit Score Systems in 2008 I thought that paying on time, in full, and never going over a few hundred bucks a month would at least keep the same result. Have a great Wednesday, CP

Re: How can a great score go down without reason?

Anonymous — Wed, 19 Nov 2008 12:19:30 GMT

The thing is, as far as your score in the area of util, it doesn't matter if you use your card a little or a lot and you do PIF, what gets reported is what affects your score in the util area.

CCC report at different times of the month. You have to make sure you are PIF before the report date.

HSBC reports your balance on the last business day of the month and reports the balance of that date. So, even if I were to PIF every month, if I use my card on Nov 26th, chances are a balance is going to be reported.

Total balances and total CL determine how much is ok to report without hurting you too much.

For someone with a $500 limit, letting $200 report would hurt them.

For somoene with a total CL of $5,000, letting $200 report would have less effect.

Re: How can a great score go down without reason?

Anonymous — Wed, 19 Nov 2008 15:41:30 GMT

Hi ralphtempler!

You wrote: "My credit score in October 2008 was 830. The November score is 817." Was this a genuine FICO score? Was this your Equifax, Experian or TransUnion score?

You also mentioned: "my monthly credit card bills range from 20.00 to 300.00 but are never fianced (sic) ." You also stated that you have a total of 2 credit cards. On your credit cards' statement dates, do you show a balance on one card, or do you show balances on both?

Message Edited by psychic on 11-19-2008 10:41 AM

Re: How can a great score go down without reason?

Anonymous — Thu, 20 Nov 2008 09:31:47 GMT

Hi Sidewinder: Thanks for the post. In my case even if every time a report is generated is before I get the bill and pay in full the total limit on the 2 credit cards is almost 19,000 and the balance is never worse than 400 before I mail the check(s). If a person stays under 3 percent of the limit wouldn't that alone be reason to keep the score at least stable? It seems brutal that if you want the credit score to stay stable or rise you better not buy anything more than chewing gum. Thanks again and enjoy the day, cp

Re: How can a great score go down without reason?

Anonymous — Thu, 20 Nov 2008 09:34:30 GMT

Hi Psychic: Thanks for the post. For example this month one credit card had a 30 day total of 60.00 and I paid it in full the day the bill came. The other card was paid in full the day it arrived (roughly 2 weeks ago).

Even if it is a couple of bucks I try to use each card 1x per month so the credit card companies don't get mad for inactivity. Thanks and have a great day, cp

Re: How can a great score go down without reason?

Anonymous — Thu, 20 Nov 2008 10:03:51 GMT

Hi ralphtempler!

In your first post, you mentioned that you used 2 credit cards. Often times your FICO score will be hurt if you're carrying balances on too many credit cards. I know that 2 doesn't seem like "too many." I have 5 major credit cards. If I show balances (on my statement dates) on 3 of my 5 major credit cards, my FICO score decreases, because I "have too many credit cards carrying balances." It has been said that it's best to never show balances (on your statement date) on more than 1/2 of your total number of cards. In your case, this would mean to show a balance on only one card.

The way to avoid showing balances on both cards would to be to pay (in full) one of your credit card balances before your statement date, so that card reports a $0 balance. It is important to show a small balance on one of your cards.

Message Edited by psychic on 11-20-2008 05:03 AM

Re: How can a great score go down without reason?

Anonymous — Fri, 21 Nov 2008 07:15:52 GMT

Hi Psychic: Hope things are good today. Maybe I can try this for next month, use only 1 card of the 2 or if I use both I'll pay in full in advance. The formulas that are being used seem strange to somebody not in the business. If having 2 cards, no late payments, only charging 1-3 percent of a the total limit per month, and no financing isn't good enough to cause stability or constant growth in the score, you have to wonder. Enjoy the weekend, CP