No change in credit habits and score dropping!!!!????

[Anonymous]

My credit score from TransUnion is nothing but NEVER LATE, NEVER LATE, NEVER LATE or whatever term they use. In fact it's almost impossible for me to be late as I have everything set up on autopay and always have that one account I use primed with enough each month. I only have 2 credit cards and they only have a little over $2000 on each of them. YET, my score has gone from what Credit Sesame says was about 817 a year ago to 779. Now one might say still in the excellent range.

BUT, yesterday I applied for the Discover 14 month 0% interest and ran into trouble. They said my true score was about 720!!!  So how much is Credit Sesame really doing for me. They are telling me I'm in the EXCELLENT range and Discover considers I'm only FAIR.  I think one card I have I pay about 12.75%apr. DISCOVER said, however we will give you a card at 0% for 6 months and after that 22+%apr. ??????  I've never paid that on a card. I don't understand. I have a flawless payment history. I am on social security, a little over $1000 a month but this has been true for several years now and I continuosly have recieved mailers from companies to use their card. Including most recently from DISCOVER, only to  ''discover'' the above bad story.  

I tried doing some research and found that since I only had 2 cards and both were getting near maxed (heck the one is limited at $2500 and the other similar) that the % of my credit limits is being neared. I read that about 30% of what you are good for is nice for a score and 10% is even a ""WOW"" factor for your score. So Credit Sesame says I'm only using about 36% of my credit limit.

So I ask you, what good is Sesame info doing me?
Sesame says my score is 779 Excellent, .  Discover says it's 720, not that great.

They say 30% is good. Sesame says I'm only using 36%

And yet my score is steadily declining and I cannot figure why?  Should I have more cards with $0 balances so it pumps up my credit availability? Would that work. I can't figure what's going on and I can't figure what good Sesame's info is for me. And I'm darned mad that DISCOVER treated me like a credit risk and offerred me a corresponding interest rate (22+%apr) after 6 months. What say ye? Anyone know?

Thanks, Jack  ":-\\  (extremely puzzled)

[DaveSignal]

Credit Sesame is a free tool that can be useful for looking at the data on your experian credit report.  They also provide a FAKO score that is not used by lenders.  There is no benefit to trying to compare your FAKO score to a real credit score.  It isn't scored using the same criteria, weighting, buckets... it can go down when your FICO goes up, and vice versa.  Often, a large FAKO change can result in no change at all for a FICO score.

So maybe your score isn't dropping at all.  You just never knew what your FICO actually was.

[Anonymous]

So I'm wondering where the help really comes in. What info there is relevant for me if none is to be believed. Up is down, down is up, what you see might be or not be. What a crap shoot. It appears the service exists mainly to try to sell products. (Slap on Head) I should have known. ":-\\  thanks for your time. 

BTW, is there really a safe place to get a FICO score once without being scammed for many months? Thanks!

[DaveSignal]

Yes, the website is there to make a profit and does try to sell products.  It also probably makes money off of every credit application it redirects.... none of which are preapprovals.

But, for some people, Credit Sesame is a useful free tool to verify some of the account data that is on the Experian credit report once a month.  Sometimes, I look at it for fun, but I also have a paid credit monitoring service that makes it easier for me to track credit report changes quickly.  My 3-in-1 CMS is useful for me, because I am still in a rebuilding process.

720 is a good FICO though.  You won't have problems getting approvals.  As for your APR, after the intro rate, you could try just calling them and asking for lower.

EDIT TO ADD:  As for getting a FICO score, you will get a free monthly Transunion FICO with your new Discover card.   You could monitor your progress with just that.  You can also purcahse single scores from myFICO, but if you are serious about monitoring progress and wanted more than the TU score, I would think about the Equifax Score Watch offered here.  That gives regular Equifax FICO updates for most changes that occur throughout the month on your Equifax credit report.  It is also pretty cheap, you get multiple score updates every month for less than the cost of one credit report.  I have been using it for years.

[Anonymous]

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@DaveSignal wrote:

Yes, the website is there to make a profit and does try to sell products.  It also probably makes money off of every credit application it redirects.... none of which are preapprovals.

But, for some people, Credit Sesame is a useful free tool to verify some of the account data that is on the Experian credit report once a month.  Sometimes, I look at it for fun, but I also have a paid credit monitoring service that makes it easier for me to track credit report changes quickly.  My 3-in-1 CMS is useful for me, because I am still in a rebuilding process.

720 is a good FICO though.  You won't have problems getting approvals.  As for your APR, after the intro rate, you could try just calling them and asking for lower.

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Dave you do seem knowledgable and I appreciate that. I have reverse mortgage money in "store" not being used. I think the variable rate is 2% or a ltille above as it's like a mortgage. I've had it for several years and used in minimally. Just wanted to get in the system before it changed or dropped or something. It's a HUD backed governement guarnteed thing. Do you think I'd be wisest to pay off these small loans with that RM available money at 2% or ?  Is that a no brainer?  And do you have a recomment for a service to peek at the feal FICO at free or minimal one time cost>?

[DaveSignal]

I edited my post above just before you responded, but the Discover card that you were just approved for will give you a free Transunion FICO score each month.

As for taking money out of savings to pay loans, I would do whatever is easiest for you and/or makes you the most money.  I wouldn't rush to pay down an installment loan, however, since it won't do much for your FICO score anyway.  One of the largest FICO scoring factors is revolving utilization (credit cards).  So, if you are about to apply for something new or what a new house or something, then spend a month to get your credit cards reporting $0 statement balances except for one card, which should have a balance but be less than 10% of its credit limit. Many members have reported this quick utilization change results in an immediate score increase, which can be duplicated every time you manipulate your credit card utilization like this.  You don't actually need to keep all cards reporting like this all of the time, but can use the tactic to get a score bump just before applying for something new.

[Anonymous]

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@DaveSignal wrote:

I edited my post above just before you responded, but the Discover card that you were just approved for will give you a free Transunion FICO score each month.

As for taking money out of savings to pay loans, I would do whatever is easiest for you and/or makes you the most money.  I wouldn't rush to pay down an installment loan, however, since it won't do much for your FICO score anyway.  

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And I edited mine too probably after you had read what I typed wrong. What I meant to say was that I that I have Reverse Mortgage monies available at 2.65%apr. and about $50000 I can tap into pre-approved on partial equity in my house I own.  Why should I be paying off one card at 12.75%apr and another, unbelieveablly since I've had it decades, about 4.74%apr when I could pay them off with Reverse Mortgage money I only have to pay 2.65%apr. Seems like a no-brainer to me unless there's something I don't see. I'd rather be paying money into the RM lender at 2.65 than the other rates?  No?  What say ye? lol

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[DaveSignal]

I don't know much about reverse mortages, but if you can pay off your credit cards using a lower interest financing, this should save you money and would improve your FICO score since your revolving utilization would drop.

[takeshi74]

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@Anonymous wrote:
No change in credit habits and score dropping!!!!???? 

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 Scores are based on what's in your reports. When was the last time you pulled them?

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@Anonymous wrote:

So how much is Credit Sesame really doing for me. 

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Credit Sesame is just one tool among many.  It's not really what it's doing for you as much as what you're doing with it.  If you're relying on it to determine your FICO's then you're just setting yourself up for disappointment for reasons already stated above.  It's handy for monitoring changes to your credit.

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@Anonymous wrote:

I tried doing some research and found that since I only had 2 cards and both were getting near maxed (heck the one is limited at $2500 and the other similar) that the % of my credit limits is being neared. I read that about 30% of what you are good for is nice for a score and 10% is even a ""WOW"" factor for your score. So Credit Sesame says I'm only using about 36% of my credit limit.

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Utilization definitely plays a major role in your credit scoring ("Amounts Owed" in the link below):

http://www.myfico.com/crediteducation/whatsinyourscore.aspx

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@Anonymous wrote:

They say 30% is good. Sesame says I'm only using 36%

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30% is the generally recommended maximum.  If you're above 30% then work to get under it and keep in mind that ~10% tends to be ideal.  If you're maxing (much higher than 30% but I don't recall what % is considered maxed) any cards you're taking additional hits.

Keep in mind that you can manage reported utilization by paying prior to statement end for cards that report on statement date.

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@Anonymous wrote:

And I'm darned mad that DISCOVER treated me like a credit risk and offerred me a corresponding interest rate (22+%apr) after 6 months. What say ye? Anyone know?

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As always, it's a matter of one's credit versus the underwriter's criteria.  Creditors vary.  My Discover APR is higher than my other cards.

[Anonymous]

Dave and Takeshi74 you guys have been most helpful. You really have started to help me unravel the 'mystery' of credit scoring. I can see why now the score has dropped. I think most think just the fact that they are never late with payments is all the big deal. While helpful I'm sure there's other factors such as income and how much your cards are maxed out. I have put more on the only 2 cards I own the last year. Now, to be frank, the 2 of them only realize about $4000+ of debt, which is not much in these days. However I think the total limit of the 2 might be about $5500.  I didn't realize getting to that upper limit of the max did so much damage so to speak. So here's a hypothetical I'd like to put to you.  Is a person that has $4000 of total debt worse off with 2 cards with a total borrowing power of $6000. Or that $4000 of debt spread out over 4 cards with a total borrowing power of $6000. I hope I presented that clearly. I guess what I'm saying is if I apply for more cards, use them wisely and keep the debt down while the borrowing power of the total of them is higher ... am I better off as far as a credit score goes?

Thanks for this discussion. You are helping one poor guy understand it!  ":-D  jack