$5 Over Credit Limit Resulted in 32 pt. Drop - Can I resolve this?!

[Anonymous]

Greetings:

As a woman in her very early twenties (with less than average college debt), a death in the family 2+ years ago resulted in payments being delayed and a credit score of 508 to begin with.  After much research, I became serious about my score and since, have never missed a payment, gotten a secured credit card, and watched my credit score rise to over 630.  Sadly, I recently went over my $250 secured credit limit by $5, and watched my FICO score plummet back down to 599.  I have never missed a payment with the company and am planning to put a portion of savings towards this card to increase my available credit so that I can continue to operate with less than 20% credit to debt ratio from now on. 

My question: Is there a way I can work with the bureaus to resolve this $5 error, or am I going to need to put thousands into a secured credit card to simply increase my credit-debt ratio?  If so, how?

Thanks for the help!

[pdog661]

Is your only limit 250?

If so. just pay down to $22.50 and your score will recover next month.  

[Anonymous]

@pdog661

Yes, my credit limit is only $250, as I wanted to start responsibly with something I knew I could manage.   I pay the balance in full every month - are you saying that if I pay it off by the due date, my score should recover?

Thank you!

[pdog661]

Yes..... Utilization of your revolving credit is a 30% of your credit score.  

Utilization means the amount of money you have on your credit card balances vs the amount of open credit available to you.  

The best ratio to carry month to month is 9% of your total open credit limits.  

If you only have 250 available to use, and you used 255 then your utl rate is 102%.  This will be a big negative on your credit file.  

A credit card is considered maxed out if you use more then 90% of the available balance, or in your case if you carry a balance greater then $185.00.

A maxed out card can carry a big score drop.  When you pay down the card you will see the points come back assuming nothing else on your file has changed IE collections, or judgments etc.  

[parakleet]

Has your statement cut already with the balance being over the credit limit? If so, then yes, PIF by due date and your score should go up. If your statement hasn't cut yet, then I believe what @pdog661 is saying is that you should pay your balance down to 9% and let that amount report as your statement balance.

[Dubious]

You need to pay it before your next statement closes. 

[Dubious]

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@parakleet wrote:

@Has your statement cut already with the balance being over the credit limit? If so, then yes, PIF by due date and your score should go up. If your statement hasn't cut yet, then I believe what @pdog661 is saying is that you should pay your balance down to 9% and let that amount report as your statement balance.

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If her score went down then her statement with the $255 balance already cut because it was reported to the CRAs. 

[wHiTeSoL]

Yeah Fico scoring has no memory, once you pay this down and it reports next month it'll be like this month never happened!

[enharu]

Utilization aspect of your scoring is based on your current utilization. It does not take into consideration your previous utilization ratios.

So once you pay down that card, you should see your scores go back up.

[Anonymous]

Hello.

Not to beat a dead horse but big yes to what's already been said. And no, there's no recourse because nobody did anything to you. It's just how the scoring works. It'll be easy peezy once you get the hang of the utilization game.

You can use the card but just pay it down under 10% before the end of your billing period.