topic Re: 15 Point drop after one card over 50% but overall under 18% util, how to get points back? in General Credit Topics

15 Point drop after one card over 50% but overall under 18% util, how to get points back?

Superduper2014 — Fri, 04 Jan 2019 21:36:40 GMT

Hi guys,

Trying to understand this.

My overall credit card use is 18% of credit limits.

I have one card that this month reported 64% of credit limit and immediately credit carma scores 15 point drop.

They say that you should use 30% of the credit limit to have a "healthy" credit utilization, but I thought that overall credit utilization was what counted the most?

Is this the reason why I see sooooo many people here opening a myriad of credit cards so they can spend on them under 30% of each and spread the spending to increase scores?

What should I do to recover these points other than paying this card back to 30% of utilization?

Would opening another card or increasing credit limits on existing cards in order to have more available credit across the board help in any way when you are this high in utilization on 1 card?

Thanks for any insight.

Scores via Karma dropped to 732 on equifax and trans.

Re: 15 Point drop after one card over 50% but overall under 18% util, how to get points back?

Gmood1 — Sat, 05 Jan 2019 00:08:09 GMT

First pull your real scores and see what they are, it only cost a $1. Just cancel before the trial ends.
https://www.experian.com/help/login.html

Re: 15 Point drop after one card over 50% but overall under 18% util, how to get points back?

DaveInAZ — Fri, 04 Jan 2019 23:21:49 GMT

Yes, Credit Karma is good for reviewing your credit reports and seeing things like your one card is at 64%, but their scores are useless, no major creditor uses them.

And yes, taking any one card over 50% usage is a score killer, regardless of overall utilization. I learned that the hard way a few years ago, I think my score took a 20 point hit. And while they say under 30% is best, and it is, I've found that one or two cards over 30% but under 50% doesn't hurt your score too badly as long as overall utilization is under 30%, it's over 50% that's the killer. Here's the scoring of credit card utilization:

0-9%	Excellent
10-29%	Good
30-49%	Fair
50-74%	Poor
75%+	Very Poor

Re: 15 Point drop after one card over 50% but overall under 18% util, how to get points back?

SouthJamaica — Sat, 05 Jan 2019 00:08:27 GMT

@Superduper2014 wrote:
Hi guys,

Trying to understand this.

My overall credit card use is 18% of credit limits.
I have one card that this month reported 64% of credit limit and immediately credit carma scores 15 point drop.
They say that you should use 30% of the credit limit to have a "healthy" credit utilization, but I thought that overall credit utilization was what counted the most?

Is this the reason why I see sooooo many people here opening a myriad of credit cards so they can spend on them under 30% of each and spread the spending to increase scores?

What should I do to recover these points other than paying this card back to 30% of utilization?

Would opening another card or increasing credit limits on existing cards in order to have more available credit across the board help in any way when you are this high in utilization on 1 card?

Thanks for any insight.

Scores via Karma dropped to 732 on equifax and trans.

1. Credit Karma scores are Vantage 3.0 scores, not FICO scores, and are meaningless.

2. You should pay the 64% card down to 28% or less.

3. You should try to keep all cards at 28% or less, optimally having many report zero.

4. You should get your overall utilization down from 18% to 9% or less.

5. In order to advise you on requests for credit limit increases and new card applications, we would need to know what cards you have and what your FICO scores are.

Re: 15 Point drop after one card over 50% but overall under 18% util, how to get points back?

Anonymous — Sat, 05 Jan 2019 00:23:49 GMT

@Superduper2014 wrote:
Hi guys,

Trying to understand this.

My overall credit card use is 18% of credit limits.
I have one card that this month reported 64% of credit limit and immediately credit carma scores 15 point drop.
They say that you should use 30% of the credit limit to have a "healthy" credit utilization, but I thought that overall credit utilization was what counted the most?

Is this the reason why I see sooooo many people here opening a myriad of credit cards so they can spend on them under 30% of each and spread the spending to increase scores?

What should I do to recover these points other than paying this card back to 30% of utilization?

Would opening another card or increasing credit limits on existing cards in order to have more available credit across the board help in any way when you are this high in utilization on 1 card?

Thanks for any insight.

Scores via Karma dropped to 732 on equifax and trans.

I know you hear that number often and so do I. Let me interpret that though. 30% would be considered by many to be responsible borrowing. It is certainly not the optimal level to be at for scoring purposes.

Re: 15 Point drop after one card over 50% but overall under 18% util, how to get points back?

CreditInspired — Sat, 05 Jan 2019 15:32:26 GMT

@superduper2014 asked:
Is this the reason why I see sooooo many people here opening a myriad of credit cards so they can spend on them under 30% of each and spread the spending to increase scores?

IME, yes, but this is to keep my overall UT at less than 3% and any per card UT that has a balance at less than 8.9%.

Personally, for my spend and comfort level, 30% is way too high.

Example: I asked for CLIs on both my DiscoverIT and AmX ED because I anticipated making big purchases using those cards. Therefore, my UT on those cards would still be under 8.9%.

Re: 15 Point drop after one card over 50% but overall under 18% util, how to get points back?

Superduper2014 — Fri, 22 Feb 2019 21:27:34 GMT

@SouthJamaica wrote:
@Superduper2014 wrote:
Hi guys,

Trying to understand this.

My overall credit card use is 18% of credit limits.
I have one card that this month reported 64% of credit limit and immediately credit carma scores 15 point drop.
They say that you should use 30% of the credit limit to have a "healthy" credit utilization, but I thought that overall credit utilization was what counted the most?

Is this the reason why I see sooooo many people here opening a myriad of credit cards so they can spend on them under 30% of each and spread the spending to increase scores?

What should I do to recover these points other than paying this card back to 30% of utilization?

Would opening another card or increasing credit limits on existing cards in order to have more available credit across the board help in any way when you are this high in utilization on 1 card?

Thanks for any insight.

Scores via Karma dropped to 732 on equifax and trans.
1. Credit Karma scores are Vantage 3.0 scores, not FICO scores, and are meaningless.
2. You should pay the 64% card down to 28% or less.
3. You should try to keep all cards at 28% or less, optimally having many report zero.
4. You should get your overall utilization down from 18% to 9% or less.
5. In order to advise you on requests for credit limit increases and new card applications, we would need to know what cards you have and what your FICO scores are.

Ok, I have calculated the amounts I would need to pay off in order to bring my card down to exactly 28%.

This card will report in around 7 days, so I will be able to see what this does without any other changes to my report.

I am hoping that I can see a good jump in credti scores from doing this. You figure at least what I came down right?

Also, I am going to completely pay off another card that has a promo APR expiring next month. This card will be report on the 6th of March.

So, by then I will just have one card at 28% utilization and my overal Utilization will be way below 9%, which will be interesting to see if my credit truly jumps up.

Thanks

Re: 15 Point drop after one card over 50% but overall under 18% util, how to get points back?

Anonymous — Fri, 22 Feb 2019 22:21:49 GMT

@Superduper2014 wrote:
@SouthJamaica wrote:
1. Credit Karma scores are Vantage 3.0 scores, not FICO scores, and are meaningless.
Ok, I have calculated the amounts I would need to pay off in order to bring my card down to exactly 28%.
This card will report in around 7 days, so I will be able to see what this does without any other changes to my report.
I am hoping that I can see a good jump in credit scores from doing this. You figure at least what I came down right?

Also, I am going to completely pay off another card that has a promo APR expiring next month. This card will be report on the 6th of March.
So, by then I will just have one card at 28% utilization and my overal Utilization will be way below 9%, which will be interesting to see if my credit truly jumps up.

A number of people are letting you know that your scores from Credit Karma have no practical value. But it sounds like you still are planning to use Karma as the place you use to get scores.... is that right?

Is the reason for this that you don't understand how to get FICO scores for free or for almost no cost? If that's the problem, let us know and the folks here will walk you through that.

Re: 15 Point drop after one card over 50% but overall under 18% util, how to get points back?

Anonymous — Sat, 23 Feb 2019 04:35:45 GMT

While it sounds super simple and obvious, any event that causes a FICO score to drop X points if reverses will cause a FICO score to increase X points. That said, if your reported utilization went up Y%, all that is needed is for you to lower it Y% for your FICO scores to return to their previous place. That of course assumes that no other [scoring] factors change during that time... so it's definitely an "all other things being equal" consideration.

Re: 15 Point drop after one card over 50% but overall under 18% util, how to get points back?

Anonymous — Sat, 23 Feb 2019 04:37:17 GMT

@Superduper2014: these good folks are giving you good advice. Your scores will definitely jump absent any other interference if you follow their advice.

Re: 15 Point drop after one card over 50% but overall under 18% util, how to get points back?

Superduper2014 — Sat, 23 Feb 2019 19:48:07 GMT

@Anonymous wrote:
A number of people are letting you know that your scores from Credit Karma have no practical value. But it sounds like you still are planning to use Karma as the place you use to get scores.... is that right?

Is the reason for this that you don't understand how to get FICO scores for free or for almost no cost? If that's the problem, let us know and the folks here will walk you through that.

Thanks for reminding me of this. I have overlooked that crucial part and was incorreclty asuming credit karma scores would go up and down in parallel to real ficos, so if karma went down then more likely real fico would too.

I apologize and would like to share what I learned.

I have had a Discover card for a while and also a subscription to experian score tracker that I forgot all about.

So I was able to go back and look at my Fico 8 scores for the past few months using Discover free scores and experian's website.

To my surprise, they have not changed even though they show the "offending" card at 64%

So Experian Fico 8 is 722 and Trans 8 is 714.

They were the same scores for the past 3 months, so they did not care even with that card at such high balance.

I am curious to know why despite going above the recommended credit utilization, there was no impact on my Fico 8 scores?

Is Fico 8 the fico that is currently being used by lenders when you apply for credit cards?

Finally, if it makes no difference in my case whether I have a 64% utilization or lower (since when it util was lower my scores were the same), then it makes no difference if I bring that card down to 28% as I calculated yesterday?

I think that what prevents my scores from going up is an old charged off account that was paid and settled and is due to be removed this year. This account DOFD is almost at 7yrs and last pymt was 2015. I tried to get early removal, but all 3 didn't want to, despite being a month away from Transunion scheduled removal for example, and they suggested I dispute the account. So when that happnes, maybe it will what will bring my scores up for real.

I appreciate everyones' patience with me and great comments!

Re: 15 Point drop after one card over 50% but overall under 18% util, how to get points back?

SouthJamaica — Sat, 23 Feb 2019 20:29:42 GMT

@Superduper2014 wrote:
@Anonymous wrote:
A number of people are letting you know that your scores from Credit Karma have no practical value. But it sounds like you still are planning to use Karma as the place you use to get scores.... is that right?

Is the reason for this that you don't understand how to get FICO scores for free or for almost no cost? If that's the problem, let us know and the folks here will walk you through that.
Thanks for reminding me of this. I have overlooked that crucial part and was incorreclty asuming credit karma scores would go up and down in parallel to real ficos, so if karma went down then more likely real fico would too.
I apologize and would like to share what I learned.

I have had a Discover card for a while and also a subscription to experian score tracker that I forgot all about.
So I was able to go back and look at my Fico 8 scores for the past few months using Discover free scores and experian's website.

To my surprise, they have not changed even though they show the "offending" card at 64%
So Experian Fico 8 is 722 and Trans 8 is 714.
They were the same scores for the past 3 months, so they did not care even with that card at such high balance.

I am curious to know why despite going above the recommended credit utilization, there was no impact on my Fico 8 scores?
Is Fico 8 the fico that is currently being used by lenders when you apply for credit cards?

Finally, if it makes no difference in my case whether I have a 64% utilization or lower (since when it util was lower my scores were the same), then it makes no difference if I bring that card down to 28% as I calculated yesterday?
I think that what prevents my scores from going up is an old charged off account that was paid and settled and is due to be removed this year. This account DOFD is almost at 7yrs and last pymt was 2015. I tried to get early removal, but all 3 didn't want to, despite being a month away from Transunion scheduled removal for example, and they suggested I dispute the account. So when that happnes, maybe it will what will bring my scores up for real.

I appreciate everyones' patience with me and great comments!

You are being penalized in FICO 8 whenever you have an individual revolving account at 30% or more. If you get your highest utilized account down to 28% you'll realize a boost in your scores.

Re: 15 Point drop after one card over 50% but overall under 18% util, how to get points back?

Superduper2014 — Tue, 26 Feb 2019 19:26:53 GMT

UPDATE:

This is crazy good.

I called every bureau to get an early removal of an old collection due to fall this year after 7yrs.

I checked today on the disputes they started and only Transunion deleted the account so far, so I went ahead and bought the $1 experian scores for all three to see what Fico Transunion shows now.

Just by deleting the old charged off account my FICO with transunion went up 49 points!!!!

Trans was 714 and today is 763

Mind you nothing else has changed and I still have the one credit card at 63% util. This card reports in a couple of days.

My conclusion here is that for some reason and despite the rules known here, in my case having a util above 30% on one card did not penalize my fico score as it was the same before 30% util and at 64% util. Only my vantage 3.0 scores given by credit karma showed a drop in scores when it reached 64%. Also, what was holding back my Fico was the charged off account showing late payments.

What do you all make of this?

Re: 15 Point drop after one card over 50% but overall under 18% util, how to get points back?

Queen_Etherea — Thu, 28 Feb 2019 19:10:01 GMT

My overall utilization went from 15% to 18% and it dropped my score 8 points . I had to make some larger purchases than normal, but I plan on paying these cards all off in the next couple of months. Can't wait to see what my score will be then!

Re: 15 Point drop after one card over 50% but overall under 18% util, how to get points back?

Queen_Etherea — Thu, 28 Feb 2019 19:23:59 GMT

@Superduper2014 wrote:
UPDATE:

This is crazy good.

I called every bureau to get an early removal of an old collection due to fall this year after 7yrs.

I checked today on the disputes they started and only Transunion deleted the account so far, so I went ahead and bought the $1 experian scores for all three to see what Fico Transunion shows now.

Just by deleting the old charged off account my FICO with transunion went up 49 points!!!!
Trans was 714 and today is 763

Mind you nothing else has changed and I still have the one credit card at 63% util. This card reports in a couple of days.

My conclusion here is that for some reason and despite the rules known here, in my case having a util above 30% on one card did not penalize my fico score as it was the same before 30% util and at 64% util. Only my vantage 3.0 scores given by credit karma showed a drop in scores when it reached 64%. Also, what was holding back my Fico was the charged off account showing late payments.

What do you all make of this?

Usually having the last collection fall off results in the biggest score bump. So CONGRATS!!! That's seriously amazing! Now just keep up the great work and you'll be on your way to the 800's in no time.

Re: 15 Point drop after one card over 50% but overall under 18% util, how to get points back?

Anonymous — Fri, 01 Mar 2019 02:01:05 GMT

@Queen_Etherea wrote:
My overall utilization went from 15% to 18% and it dropped my score 8 points

Are you sure that was the cause of the score drop? Nothing else changed? What about number of accounts with a balance and potential individual utilization crossings? An aggregate move from 15% to 18% in and of itself shouldn't cause a FICO score drop at all.

Re: 15 Point drop after one card over 50% but overall under 18% util, how to get points back?

Queen_Etherea — Fri, 01 Mar 2019 22:21:09 GMT

@Anonymous wrote:
@Queen_Etherea wrote:
My overall utilization went from 15% to 18% and it dropped my score 8 points
Are you sure that was the cause of the score drop? Nothing else changed? What about number of accounts with a balance and potential individual utilization crossings? An aggregate move from 15% to 18% in and of itself shouldn't cause a FICO score drop at all.

Now that I think about it, I think a small charge posted on both my Capital One and PayPal cards. Those have both been at $0 for quite some time and I forgot to pay them off before the reporting date. It's no big deal as I'm not apping for anything anytime soon. I already got those 8 points back and more!

Re: 15 Point drop after one card over 50% but overall under 18% util, how to get points back?

Anonymous — Sat, 02 Mar 2019 08:14:58 GMT

@Queen_Etherea wrote:
Now that I think about it, I think a small charge posted on both my Capital One and PayPal cards. Those have both been at $0 for quite some time and I forgot to pay them off before the reporting date. It's no big deal as I'm not apping for anything anytime soon. I already got those 8 points back and more!

Good catch. It sounds like you have 2 more accounts with balances now compared to before. What was your total number of accounts with balances before compared to now? If you turn that into percentages, what is the before/after percentages? For example, if you went from 3/7 accounts to 5/7 accounts, you moved from 43% of accounts with a balance to 72% of accounts with a balance, which would have definitely crossed a threshold at 50% (for example).

Re: 15 Point drop after one card over 50% but overall under 18% util, how to get points back?

Queen_Etherea — Tue, 05 Mar 2019 15:48:31 GMT

@Anonymous wrote:
@Queen_Etherea wrote:
Now that I think about it, I think a small charge posted on both my Capital One and PayPal cards. Those have both been at $0 for quite some time and I forgot to pay them off before the reporting date. It's no big deal as I'm not apping for anything anytime soon. I already got those 8 points back and more!
Good catch. It sounds like you have 2 more accounts with balances now compared to before. What was your total number of accounts with balances before compared to now? If you turn that into percentages, what is the before/after percentages? For example, if you went from 3/7 accounts to 5/7 accounts, you moved from 43% of accounts with a balance to 72% of accounts with a balance, which would have definitely crossed a threshold at 50% (for example).

Literally all my cards are reporting a balance so 100%. Actually, no, my AMEX BCE isn't reporting anything, but the other 10 are. Holy crap... I can't believe I have 11 cards. I think I went a little overboard during my rebuild LOL. I really want to close my Capital One because it's for sure bucketed and not going to go anywhere. It's only $500, so it wouldn't really hurt me, but then why close it if I'm not paying an AF?

Re: 15 Point drop after one card over 50% but overall under 18% util, how to get points back?

Anonymous — Tue, 05 Mar 2019 17:50:49 GMT

That's totally up to you. I'd suggest leaving it at a $0 balance and throwing it in your SD, giving it a swipe every 6 months or so to keep it alive.

It sounds like if you have 10 out of 11 cards with balances that you should give that a little thought. The first question is whether or not they all have balances because you're carrying balances on them, or are the balances just naturally reporting every month but you are indeed paying all of them in full? If you're carrying balances, my suggestion would of course be to work on moving yourself from a Revolver to a Transactor where you're never paying any interest. If you aren't carrying balances, my suggestion would be to slightly reconsider when/how you're paying your cards in full monthly if you'd like to see some FICO score gains. By paying your full current balance instead of your full statement balance a couple of days before your statement period closes, you'd stand a greater chance of more of your cards reporting $0 balances, something that some of the FICO scoring models (especially the mortgage ones) really like to see.