EXPERIAN FICO SCORE WENT DOWN 3 POINTS NOT SURE WHY, HELP

[Anonymous]

Good Morning everyone. I logged into my Experian account to monitor my Fico score, since July my score had increased 6 points, going up from 721 to 727 and it stayed at 727 throughout July up until yesterday, it went down 3 points. I guess I am just confused since I have not done anything drastic nor changed my spending habit or behavior, I tried contacting Experian and MyFico to get some answers but all they could tell me is that Fico is such a complexed algorithm that it would be hard to pinpoint what the cause was. I was hoping someone with experienced credit can give some advise. I am new to credit with a thin file, to give you a clearer picture of my profile:

Age of Oldest Account: 11 mos.

AAoA: 6 Mos.

Total Number of Accounts 3 Revolvers 1 Charge Card

Score from July 1 to August 15 on Experian 727 with the ff balances reporting

Utilization @ 1%

Capital One: $0 (oldest account @ 11 mos)

American Express BCE: $7 ( 5 mos. old)

Discover IT: $10 ( 5 mos.)

Others:

AMEX Green: $0 (4 mos)

As of August 15 Experian down 3 points 724

Utilization still @ 1%

Capital One: $30

American Express BCE: $0

Discover IT: $10 (from July Statement)

Others

AMEX Green: $0

Factors Helping( Same factors from previous months)

No missed payments

Low credit usage

Recent Credit card usage

Factors Hurting (same factors as every month)

Short credit history

No history of installment loans

Short revolving history

I guess I am just trying to get an understanding and get educated on what I did wrong to trigger the score to go down, and what can I do to bounce back from the decrease that Fico nor Experian can explain. If someone can give me some sort of advise, I really do appreciate any help and information you can provide. Thank you in advance.

[Anonymous]

Your utilization went up 235% which may be just barely enough to ding you for 3 points.

What are your credit limits on each card?  It's feasible that maybe one of the cards went from 4% utilization to 9% utilization individually, which can cause a slight ding.

 Edit: Didn't see you listed your CLs in your signature.  Doesn't feel like it's utilization related at all, but it could be.  The general rule is to not worry about small movements in FICO since the algorithm is really complicated, and there are different "scorecards" you can be on and moving between scorecards can also affect your score.

[Anonymous]

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@Anonymous wrote:

Your utilization went up 235% which may be just barely enough to ding you for 3 points.

What are your credit limits on each card?  It's feasible that maybe one of the cards went from 4% utilization to 9% utilization individually, which can cause a slight ding.

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Thank you for the response:

My CAP 1 has a $500 limit left the $30 to report

AMEX BCE is $1000

Discover: $1300 with a balance still reporting from the July statement. Planning to leave it at $0 when the statement cuts on the 23rd

Thank you once again for your input. I didn't think that the $30 I intentionally left to report would hurt my score that way. 

[Anonymous]

$30/$500 = 6% utilization.  It shouldn't hurt you, but I don't know if we really have any data points on that specifically.  I always aim for leaving a $5 balance on one card just because it works for me.

Also, letting more than 1 card report a small balance can cause a little ding as well, but you did have 2 cards reporting last month so that's likely not the reason for the ding.  That part of FICO differs between each CRA's scoring, and also based on how many cards report a balance versus how many cards you have.  So letting one card report a balance under 9% should boost you a tiny bit -- and maybe there's a line even at 5% utilization on a single card.

Remember FICO looks at overall aggregate utilization across all credit limits AND individual utilization on any card AND how many cards are carry a balance (versus how many open cards you have).

[Anonymous]

My advice is not to sweat such small fluctuations, as you'll drive yourself crazy for nothing. Concentrate your efforts where you can have the maximum effect.

Do you have a installment loan? By your downside reasons, I think not. Perhaps a share secured loan would be a good move. I see you are in the garden and it looks like you are doing a great job with the cards, but maybe the garden time would be even more beneficial with an installment loan.... Just a thought.

[Anonymous]

I agree with zipperhead -- a shared secured loan from Alliant boosted my scores majorly!

This only matters if you don't have ANY open installment loans reporting (student, car, home, personal, etc).  If you have no open loans, apply for the Alliant SSL and get the almost free FICO boost for up to 5 years!

[Anonymous]

Thank you, and exactly why I got confused since I know Experian is not sensitive to number of accounts carrying a balance, like Transunion and Equifax which based on experience from last June when I tried to let a balance report on three cards except the Charge card, it dinged points from both TU and EQ but not EX. So I was uncertain as to what would merit the decrease. Could it be that, I have not reported a balance on the CAP1 card for two months and then later allowing a $30 balance to report? It has not been dormant, I just paid off the bills in full prior to the statement cut for Cap1 the last couple of mos. But I figures since it is my longest Account on file, that leaving a balance to report might also help my scores to go up but did exactly the opposite. 

[Anonymous]

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@Anonymous wrote:

My advice is not to sweat such small fluctuations, as you'll drive yourself crazy for nothing. Concentrate your efforts where you can have the maximum effect.

Do you have a installment loan? By your downside reasons, I think not. Perhaps a share secured loan would be a good move. I see you are in the garden and it looks like you are doing a great job with the cards, but maybe the garden time would be even more beneficial with an installment loan.... Just a thought.

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Thank you Zipperhead and ABCD2199, I will look into that, So even if I currently do not have a reason to take out a loan, should I consider going for one? I mean I was trying to hold off on that until next year. Because my goal for this year is to grow the revolvers that I have, both AMEX and Discover, I am eligible to apply for an increase with AMEX this month, since I was denied at 61 days. Not sure if i'd be getting any this time, they did already SP my fico on August 12th and thankfully it was prior to this decrease. So hopefully that would get me even a partial increase from them. I do spend more on that card since my spendings are more towards groceries and cable bills and the 3% on groceries are a huge help. I usually alternate AMEX and Discover every month so as not to get overwhelmed. I really appreciate your advice and I will check out Alliant about the secured loans

[Anonymous]

The Alliant SSL technique thread is very long but you only need to read the first 3 pages or so: http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Adding-an-installment-loan-the-Share-Secu...

Here's how it works, in a short list:

• You open an account at Alliant -- it's $5.  NO CREDIT HARD PULL!
• You have $500 cash handy to transfer to your Alliant savings account. 
• Once the $500 clears, you open the SSL loan for $500.  There is no credit hard pull here either if you do an individual loan.  Married couples both on a loan MIGHT cause a hard inquiry!
• After the loan is approved and cleared, you will now have a $500 balance due, and they will loan you $500 into your savings account to use!  This means your savings balance is $505 (from your $5 opening deposit), and your loan is $500 due.
• You pay off 92% of the loan IMMEDIATELY using your savings balance.  This reduces the loan to $44 due, and they actually re-deposit the paid off amount back in savings!  So you have $505 in savings, and a $44 amount due.
• Transfer $480 or whatever out of savings back to your regular checking account to use as you wish.
• Once you pay the loan down to $44, another payment isn't due for many years.  I make a $1 payment every 2 months by pushing a payment from my (Chase) checking account to the loan, just to make sure it keeps reporting.

This gives you a nice FICO boost -- some folks get 15 points, others get 40 points, as long as the loan is open and under 9% left to pay off.  I got around 20-25 points immediately when my loan reported.

The total cost of the loan is whatever your interest rate on the $44 balance over time.  I think the total interest is less than $8 or $9 over 5 years.  It only costs you $50 or so over those 5 years once you set it up and get your money back from the initial $500 secured amount.  You are only out about $50 after 2-3 weeks.

Note: this SSL technique only helps with FICO08 scoring.  It doesn't matter much for mortgage scores, but it MIGHT help you cross a threshhold on your mortgage middle score.  That depends on what your mortgage scores are.  But for FICO08 scoring, the SSL helped me get approved for non-secured prime bank cards -- without the SSL I would be in a lower score range for sure.

[Anonymous]

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@Anonymous wrote:

The Alliant SSL technique thread is very long but you only need to read the first 3 pages or so: http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Adding-an-installment-loan-the-Share-Secure-technique/td-p/4506756

Here's how it works, in a short list:

• You open an account at Alliant -- it's $5.  NO CREDIT HARD PULL!
• You have $500 cash handy to transfer to your Alliant savings account. 
• Once the $500 clears, you open the SSL loan for $500.  There is no credit hard pull here either if you do an individual loan.  Married couples both on a loan MIGHT cause a hard inquiry!
• After the loan is approved and cleared, you will now have a $500 balance due, and they will loan you $500 into your savings account to use!  This means your savings balance is $505 (from your $5 opening deposit), and your loan is $500 due.
• You pay off 92% of the loan IMMEDIATELY using your savings balance.  This reduces the loan to $44 due, and they actually re-deposit the paid off amount back in savings!  So you have $505 in savings, and a $44 amount due.
• Transfer $480 or whatever out of savings back to your regular checking account to use as you wish.
• Once you pay the loan down to $44, another payment isn't due for many years.  I make a $1 payment every 2 months by pushing a payment from my (Chase) checking account to the loan, just to make sure it keeps reporting.

This gives you a nice FICO boost -- some folks get 15 points, others get 40 points, as long as the loan is open and under 9% left to pay off.  I got around 20-25 points immediately when my loan reported.

The total cost of the loan is whatever your interest rate on the $44 balance over time.  I think the total interest is less than $8 or $9 over 5 years.  It only costs you $50 or so over those 5 years once you set it up and get your money back from the initial $500 secured amount.  You are only out about $50 after 2-3 weeks.

Note: this SSL technique only helps with FICO08 scoring.  It doesn't matter much for mortgage scores, but it MIGHT help you cross a threshhold on your mortgage middle score.  That depends on what your mortgage scores are.  But for FICO08 scoring, the SSL helped me get approved for non-secured prime bank cards -- without the SSL I would be in a lower score range for sure.

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This is a great suggestion and I am actually on their site right now and will probably give it a shot. Thank you so much for the insights. I guess being new to credit every point counts and that's why seeing the decrease despite efforts of keeping up with the payments easily gets me frustrated. I appreciate all your advice ABCD2199