Over limit on one card

[Anonymous]

I have been rebuilding my credit and have finally reached a level I am happy with HOWEVER because of an automatic payment I had set one card went over the limit by 58 dollars, this did report on my credit and when I noticed it I paid the card in full. My scores on myFICO went down 30 points because of this , my overall credit utilization is good ( under 30) does anyone know what my scores should do once this card that went over reports and is paid in full? Will I rebound completely? This is very stressful as I am buying a house and caught me completely off guard

[Anonymous]

Your FICOs dropped because of extremely high utilization -- anything over 89% on a single credit line is considered maxed out and will slaughter your FICO scores until you report a lower balance in the future.

Once utilization reports lower, they'll go up again.

Total utilization (aggregate) is merely one part of FICO.  How you use each line individually is a big chunk of FICO and if you're letting any credit cards report over 29% utilization individually, it can smash your score way down.

My own opinion here in this part, but credit rebuilding doesn't include maxing out credit lints or running balances.  Credit rebuilding to me means learning better usage of credit so we don't repeat the errors we did before.

Are you running high balances and paying interest on many credit lines?  If so, reconsider working towards keeping your balances to $0 except for one credit line that you let report a few dollars at most.

[Anonymous]

I appreciate the reply, I am not at the beginning stages of this been doing so for a little over 2 years now , just to clarify I have 16k in available credit with 1200 total balance. This charge that did this to the card was one I set up with my dentist long ago, my utilization in over a year has not reported over 6 percent total. That said I understand the one card utilization issue this caused. I literally paid the card to zero the next day. Will my score rebound quickly? Secondly how does the myFICO 8.0 score compare to the models they use for mortgage lending I believe it is model 4 for one of the agencies. I'm hoping once this reports with 0 that my scores comes back ?

[Anonymous]

It will report to $0 on the next statement date that the bank uses -- either the actual statement date, or rarely some banks report on the 1st of each month.

SOME banks, not all or many, will do a manual update of your credit report on request.  Post the bank and maybe someone else will say if they do manual updates.  I know Discover will do a mid-cycle update on request.

Once it reports to $0 and updates, your scores will rebound.  FICO doesn't have a "memory" for over the limit, although in some rare occasions a bank may report your highest balance and on manual review someone may ask you why your highest balance is more than your limit, but I doubt this will happen.

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FICO8 is typically for credit cards.  Mortgage FICOs are older versions of the FICO score.  30D late will tank all varieties of FICO.  None of them overlook a recent 30D late.

[Anonymous]

Thank you again for your reply, I guess what I am asking is....The MyFico scores which I believe is the 8.0 model have dropped between 25-30 pts because of this mishap of mine and am curious if the other models will be hit as hard or if the 8.o models are more volatile? Is there hope that my scores return back to where they were once the update is reported? I was right around 705 on all 8.0 models and the same with the mortgage models.  I did call the bank and ask them if they could update my balance they declined however are sending me a " status letter" if I forward this status letter to the bureaus will they update it kind of like a rapid score update mortgage companies use ?

[Anonymous]

Ah, I see, you're in a time crunch.

Yes, a high utilization may have a similar effect on the older FICO models used by mortgage underwriters, but there is no way to know except for paying for a fresh 3B from MyFico which will show you all of the various FICO versions -- or wait for your mortgage company to pull your scores again.

Rapid Rescore should be able to include a paid off credit card but I've never had one myself so I'm not 100% on this -- I do know that some banks charge for rapid rescore, some don't.

Unfortunate that the lender won't refresh your credit reports -- but I'm not surprised at it, since most lenders don't seem to want to do it.  I know Chase updates any time you pay to $0 even if midcycle, and Discover updates on request, but I'm not aware who else offers that.  Seems like very few.

[Anonymous]

I really appreciate you taking the time to reply. Last thing I promise if you could be so kind to offer one more response. Regarding the scores, will they rebound as quickly as they dropped or no? I actually have a free 3 report pull coming up on 10/10

[Anonymous]

They will bounce back as soon as the banks report the new $0 balance.

That's assuming you don't report any other maxed out limits in that time frame, or have any other derogatory information post in that time frame.

[Anonymous]

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@Anonymous wrote:

Total utilization (aggregate) is merely one part of FICO.  How you use each line individually is a big chunk of FICO and if you're letting any credit cards report over 29% utilization individually, it can smash your score way down.

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While you're providing great information in this thread to the OP, the above statement isn't fully true.  With aggregate utilization in the 1%-8% range, many people can report individual card utilization as high as 48.99% utilization and see no scoring penalty.  I think it's also important to mention that aggregate utilization is King to individual card utilization.  Sure, individual card utilization can knock down a score 30-40 points or so if you max out a line, but it's not going to lower a score 100+ points like maxing out aggregate utilization can.