topic Re: Credit Scores in General Credit Topics

Credit Scores

Anonymous — Sat, 26 May 2007 00:13:38 GMT

Hi, can anyone tell me why my score dropped 7 points. On 1 of my credit cards, my balance increased from $0 dollars to $677.00. The overall credit balance on the card is $7000.00. I have 6 credit cards and only have balances of approximately $1300.00, which includes only 2 credit cards. I have no balances on the other four. It seems that I'm being punished for using the cards. I thought as long as you didn't go above 25 or 30% that would keep your scores high or at or about the same. I have no late pmts, no charge offs, no collections, no tax liens or bankrupties. I currently have a score of 759. If anyone is interested in telling me how this can happen, please tell me so I will know how to deal with this. I would appreciate your wisdom kindly. Thank you

Re: Credit Scores

Anonymous — Sat, 26 May 2007 00:35:23 GMT

Janet,

That's a good question and I will be awaiting the answer along with you. I am about to adopt the mindset that I will just pay my bills on time like I have been for many years now, use my credit cards when I have to and just not worry about the scores. My scores are in the 700's as well, but it seems I am dinged for using my cards to make a purchase or take a well deserved weekender vacation. I use one card exclusively and pay the balance off each month. Your usage of your cards is excellent and for you to be dinged 7 points is hard to fathom.

SandyK

Re: Credit Scores

Anonymous — Sat, 26 May 2007 01:47:35 GMT

Do you pay the statement balance or the actual balance?

This was one of my issues-I wasn't paying interest charges but my reported balance was not getting down when they reported.

Re: Credit Scores

Tuscani — Sat, 26 May 2007 02:13:58 GMT

1-9% util is ideal (not 20-30%). Any new Inqs?

Re: Credit Scores

Anonymous — Sat, 26 May 2007 02:47:28 GMT

Did an old closed account drop off your report? If so, it could have had a small negative affect on your overall account aging.

Also, there is a lot of speculation that there is a "grading on the curve" aspect to FICO scores, where your performance is constantly compared to others with similar credit characteristics (called scorecards). If the average performance in your scorecard group was better than yours, it might have caused your score to dip slightly.

Re: Credit Scores

Anonymous — Sat, 26 May 2007 05:58:11 GMT

Great Question, I really don't know because I have ony viewed my score lately and not my report. I will definetely check on that.

Re: Credit Scores

Anonymous — Sat, 26 May 2007 06:23:51 GMT

@Anonymous wrote:

Hi Janet. The more you use the lower your score goes. Generally banks don't like to see more than 30%, but the score changes at many lower levels. Best to use as little as you can. In this case you added to your debt. Score went down. If you add more debt on top of what you have again the score will drop further. And the same if you pay off debt, the score goes higher. Constantly changing. I wouldn't say it's punishing you. The more you borrow the more risk the bank has. When you pay it bank your score rebounds right away when it is reported. :-)

Message Edited by ilovepizza on 05-25-2007 11:23 PM

Re: Credit Scores

Anonymous — Sat, 26 May 2007 07:05:50 GMT

@Anonymous wrote:
Hi, can anyone tell me why my score dropped 7 points. On 1 of my credit cards, my balance increased from $0 dollars to $677.00. The overall credit balance on the card is $7000.00. I have 6 credit cards and only have balances of approximately $1300.00, which includes only 2 credit cards. I have no balances on the other four ...

Can you tell us what your total credit limit is for all 6 cards? Also, you mentioned that your current total CC balance is about $1300. What was your total CC balance a month ago?

Even without knowing your other CC credit limits, it looks like your current utilization is certainly less than 15%. An increase in total CC balance from last month to this month could account for the 7 point dip, especially if it meant that you crossed the magic 10% line. But if your utilization was less than 10% for both months, it does not seem right that your score should get dinged.

As Tuscani said, it's best to keep your utilization under 10% - this applies to individual cards and overall. You might want to consider asking one or more of your CC companies to bump your credit limit(s), to make it easier to keep your utilization in the safe zone.

Re: Credit Scores

Anonymous — Sat, 26 May 2007 23:10:50 GMT

Hi Timothy, I don't pay the actual balance. I always pay at least $100.00 or more after recieving my statement. there have been times when I have paid the balance.

Re: Credit Scores

Anonymous — Sat, 26 May 2007 23:20:22 GMT

Hi Revike, my overall CC balance is $16100. The two CC that I inquired about are the only balances that I have. I have a Chase @ 7000.00, Cap. 1 $1100.00, Discover $5000.00 (2) HHBank $700.00 & $500.00 and JCP $1800.00. A month ago I didn't owe anything on any of the cards. I was well under 10%. The Chase and Discover are new cards that I recieved a couple of months ago.

Re: Credit Scores

Anonymous — Sat, 26 May 2007 23:59:14 GMT

@Anonymous wrote:
@Anonymous Revike, my overall CC balance is $16100. The two CC that I inquired about are the only balances that I have. I have a Chase @ 7000.00, Cap. 1 $1100.00, Discover $5000.00 (2) HHBank $700.00 & $500.00 and JCP $1800.00. A month ago I didn't owe anything on any of the cards. I was well under 10%. The Chase and Discover are new cards that I recieved a couple of months ago.

So you basically went from 0% utilization last month to 8% utilization this month ($1,300 of $16,100 CL) - I guess that alone could account for the 7-point drop.

It's unclear (at least to me) whether FICO adjusts your score for every change in utilization, or only when your utilization crosses certain index points like 10%, 15%, 20%, 30%, etc.

Re: Credit Scores

Anonymous — Sun, 27 May 2007 01:48:25 GMT

Thanks Revike, for the input. I appreciate u posting back.

Re: Credit Scores

Tuscani — Sun, 27 May 2007 12:16:45 GMT

Janet - Any new Inqs?