TU score dropped 19 points. Can't figure out why.

Anonymous · ‎03-06-2019

Opened a Fifth Third secured card ($500 SL) in May of last year. Charge a little bit on it every month and always PIF.

Opened a Discover IT card ($1500 SL) in December of 2018.

First statement had a balance of $213. PIF. TU score of 738 on statement

Second statement balance of $0.00 TU score of 721 (dropped 17 points)

Third and last statement balance of $51 TU score of 719 (dropped 2 points)

No baddies on my credit report. No late payments on anything.

I bought a new washer and dryer in January for right around $1000 but paid it off as soon as Discover let me make the payment (before it hit my statement). Could that have caused the big 17 point drop?

What the heck am I doing wrong? Don't expect giant increases in my TU score, but certainly didn't expect a 19 point drop for using my cards responsibly.

Jnbmom · ‎03-06-2019

First off is this your FICO from discover?

Also if you only had one card opened in May and you opened a second card in December with new inquiry and new account yiur AAOA may have dropped ? Just a guess of course

EXP 780 EQ 791TU 795

Anonymous · ‎03-06-2019

@Jnbmom wrote:
First off is this your FICO from discover?

Also if you only had one card opened in May and you opened a second card in December with new inquiry and new account yiur AAOA may have dropped ? Just a guess of course

Yes, this is my FICO score from Discover. You might be onto something with the AAOA. Never really thought of that. Thanks for the reply.

Anonymous · ‎03-06-2019

Any time you open a new account, you see your AoYA drop to 0 months and also your AAoA drop as well. If your new account gave you an inquiry on TU, that could also explain part of your TU score drop.

It doesn't sound to me like your balances here would have caused the drop, as everything you've reported has been small. Keep in mind that all $0 balances reported will cause a score drop, as the algorithm cannot see any revolving credit use. Just make sure that one of your cards is allowing a small (say) $5-$20 balance to report every month to avoid a 15-20 point penalty for "no recent revolving credit use."

Anonymous · ‎03-06-2019

@Anonymous wrote:
Any time you open a new account, you see your AoYA drop to 0 months and also your AAoA drop as well. If your new account gave you an inquiry on TU, that could also explain part of your TU score drop.

It doesn't sound to me like your balances here would have caused the drop, as everything you've reported has been small. Keep in mind that all $0 balances reported will cause a score drop, as the algorithm cannot see any revolving credit use. Just make sure that one of your cards is allowing a small (say) $5-$20 balance to report every month to avoid a 15-20 point penalty for "no recent revolving credit use."

Good advice. Thank you. I left a little bit on my Disco card so it would report something. Maybe I'll alternate between the cards. Thanks again.

Anonymous · ‎03-06-2019

Cool, just remember that you don't need to pay interest in order to accomplish leaving a small balance on your card if you're using it every month. As long as you're paying your statement balance in full, you'll never pay interest. If you follow the "leave a small balance" practice, it would make your statement balance small every month... say, $20. Naturally, you'll have other charges in the next 30 days, perhaps a few hundred dollars. All that is required in order to avoid interest is to pay your previous ($20) statement balance in full, but you pay it back down to (say) $20 you'll of course more than cover that.

Anonymous · ‎03-08-2019

The trick I've been using (which I think I read on Credit Karma) is to put a small monthly charge on your CC and pay it in full every month. So I put Netflix (10.70) on a card and have it on auto pay and pay it in full every month.

I've checked and my report shows a balance of 0 every month. So they are reporting it since it's being used and paid every month.

Note, when you do this, you may have to pay a little earlier than your due date or it might show the balance before you paid it off instead of after.

Anonymous · ‎03-08-2019

@Anonymous wrote:
The trick I've been using (which I think I read on Credit Karma) is to put a small monthly charge on your CC and pay it in full every month. So I put Netflix (10.70) on a card and have it on auto pay and pay it in full every month.

I've checked and my report shows a balance of 0 every month. So they are reporting it since it's being used and paid every month.

Note, when you do this, you may have to pay a little earlier than your due date or it might show the balance before you paid it off instead of after.

It depends on what your goal is with the above. If you goal is AZEO, the above doesn't work and CK is "wrong" in that sense. If you're looking to show "revolving credit use" to the FICO algorithm, you need to have one account report a small balance. $10.70 would be a great balance to report to accomplish this, but if you're paying it off in full right away and that account is reporting $0 you are not showing "revolving credit use" with that account. What you could do is leave the $10.70 to report (it will report as $11 most likely) and then the following month when the next $10.70 shows up bringing your current balance to $21.40, you pay off the previous statement balance of $10.70, dropping you back down to $10.70 to report. Repeating that process allows you to never pay any interest, but still report a small balance on the account every month. Using autopay, after the first $10.70 reports you'd want to set up autopay to pay an exact amount ($10.70) monthly on a date a few days after your statement cuts.