Losing points when laying down debt.

Velvet12 · ‎03-26-2021

Hello all,

Any help will be appreciated. I am currently paying down some credit card debt and as my balances decrease, so does my score. Im so confused on how the credit score algorithm works. Please help!

Thank you in advance for any advise😊

AllZero · ‎03-26-2021

@Velvet12 I would recommend reading the below from ABCD2199
The Truth about Credit Card Utilization
My 11 Rules to Credit Rebuilding
FICO Score: What to pay down first?

From Birdman7
General Scoring Primer and Version 8 Master Thread, pub.5.17.20

Anonymous · ‎03-26-2021

OP, what is the source of the credit scores you say are decreasing?

Paying down (but not off) revolving debt does not decrease Fico scores. If you are in fact referencing Fico scores, they are decreasing for a reason other than you paying down revolving debt.

RobertEG · ‎03-26-2021

Even though making payments, if there is a remaining delinquent balance, the total period of delinquency upon which scoring in that category is based continues to increase with each month that the account/debt remains delinquent. Each monthly update may decrease remaining balance, and thus improve % util if a revolving account, it also updates payment history scoring by increasing the period and severity of delinquency.

Anonymous · ‎03-26-2021

Hello,

Thank you for your reply. I am using MyFico for my credit source. I lost 2 points from Experian and the alerts were the balance on my Nav Fed Reward card decresed by $216. I now have a balance remaing on that card of $700 with a credit limit of $8000 and I got a credit limit increase of $4000 on my Naw Fed Platinum card making my credit limit now $19,000 with a remaing balance of $3000. Thats all that took place.

Anonymous · ‎03-26-2021

@RobertEG wrote:
Even though making payments, if there is a remaining delinquent balance, the total period of delinquency upon which scoring in that category is based continues to increase with each month that the account/debt remains delinquent. Each monthly update may decrease remaining balance, and thus improve % util if a revolving account, it also updates payment history scoring by increasing the period and severity of delinquency.

Hello,

Thank you for your reply. I while I do have some balances remaing on 2 CC, I don't have any delinquent accounts. There is a Bankruptcy still showing on my Experian, credit score currently 690 and still showing on my TransUnion, credit score currently 690 but, it was deleted from my Equifax and my current score with them is a 814 all scores from MyFico. Ive been working really hard to pay down the 2 CC to under 10% Utilization getting really close. Im currently at an over all Uti of 14%.

Pikaboo-icu · ‎03-26-2021

@Anonymous wrote:
Hello,
Thank you for your reply. I am using MyFico for my credit source. I lost 2 points from Experian and the alerts were the balance on my Nav Fed Reward card decresed by $216. I now have a balance remaing on that card of $700 with a credit limit of $8000 and I got a credit limit increase of $4000 on my Naw Fed Platinum card making my credit limit now $19,000 with a remaing balance of $3000. Thats all that took place.

I believe that was a confusing alert.

The point drop was not due to paying down your balance, it just appeared on that same alert.

Often an alert will include a gain or drop of points that is unrelated to the text in the alert.

Is it possible you got a HP for the CLI ? As a 2 point drop sounds consistent with that.

CHEERS

Anonymous · ‎03-26-2021

@Anonymous wrote:
Hello,
Thank you for your reply. I am using MyFico for my credit source. I lost 2 points from Experian and the alerts were the balance on my Nav Fed Reward card decresed by $216. I now have a balance remaing on that card of $700 with a credit limit of $8000 and I got a credit limit increase of $4000 on my Naw Fed Platinum card making my credit limit now $19,000 with a remaing balance of $3000. Thats all that took place.

Score changes provided at the time of alerts do not have to be at all related to the alert reason. This is a common misconception and is incredibly misleading. I actually started a thread on the topic some time ago because I find it absurd that so many people like yourself are mislead by the product they're paying for. Please check out the link below:

https://ficoforums.myfico.com/t5/myFICO-Product-Feedback/Alerts-unrelated-to-provided-score-changes/td-p/5537890/highlight/false

SouthJamaica · ‎03-27-2021

@Velvet12 wrote:
Hello all,
Any help will be appreciated. I am currently paying down some credit card debt and as my balances decrease, so does my score. Im so confused on how the credit score algorithm works. Please help!
Thank you in advance for any advise😊

@Anonymoushit the nail on the head

MyFICO alerts don't provide reasons for a score change. There are certain events which trigger MyFICO alerts. If there happens to be any difference between your present score at that particular bureau and the previous score reported to you from that bureau, the score change is tacked on to the alert. There is not necessarily any connection at all between the score change and the alert substance.

MyFICO explains this in the "learn more" link contained in the alert:

"Why did my score go up when I got an alert for something negative (or why did my score go down when I got an alert for something positive)?
The short answer: Your FICO(TM) Score may change because of other events not monitored by an alert.
Whenever we send you a credit alert, we also send an updated FICO Score. To ensure you get the most current score, we calculate it based on your entire credit report at that point in time - not just the new information on the alert. This means your new score may reflect other changes that are outside of the things we watch for (see everything we monitor).
Sometimes you may see your score increase when you think it should've decreased, and vice-versa, but you'll always have your most up-to-date and accurate score."