Getting really frustrated

[Anonymous]

So over this past year, I started taking my credit score seriously. I'll admit that I've made a lot of financial mistakes in the past, which ultimately lead to my chapter 7 bankruptcy. I received my discharge about a year ago.

After my discharge, my objective has been to stay current on all new debt. I started using Credit Karma and saw my score move from the mid 400's to 670 over the last year. Great right? Wrong.

I recently learned that credit karma is mostly bs. So I signed up to get my FICO score (of course modern day capitalism dictates I need to pay for my arbitrary financial report card).

I'm also trying to help my fiance build her credit, so I requested to be added as a person that capital one can talk to on her account. She had a past due balance by 90 days.

Instead of adding me as an authorized person to talk to, they added me as an authorized user, and her payment history went on my credit reports.

No big deal, I'll just dispute it with the credit bureaus and have capital one remove me as an authorized user.

I have done that. My payment history has now reverted to perfect post bankruptcy. Credit score should go up right?

Wrong!!!

Since we removed me, my FICO score DROPPED 10 points.

I'm convinced that it's all arbitrary bs that really has no rhyme or reason.

To make matters more frustrating, we need to get in a bigger place by July, as that is when my son will be born.

My FICO score are as follows:

Experian - 548
Equifax - 590
TransUnion - 558

Hers:

Experian - 566
Equifax - 569
TransUnion - 555

We may be unable to get a new apartment (or even requalify for our current one when our lease expires and our roommate moves out) because a bunch of capitalistic a**holes are assigning arbitrary numbers that make no sense

[Anonymous]

I don’t know why you’re so aggravated — you’re a very high risk right now because of your past behaviors that led you to bankruptcy and that’s what your scores reflect. We have a great forum for rebuilding here with lots of helpful people. I would check that out. 

Depending on how many tradelines you have, the one that was added as an AU could have done any number of things that raised your score despite the negatives on the card. Your score is very low so even small things that won’t impact most files will impact yours. 

Seriously, check out the rebuilding forum and post your situation. It’s not hard to get into the low to mid 600s very quickly. 

[Anonymous]

Hi Saeren. Thank you for your reply and suggestions. I will check out the rebuilding forums.

My aggravation comes from how arbitrary this system is. I have 5 credit cards with 4100 in total available credit that I use to pay my utilities month after month and pay the balance before it's due but after the statement generates.

This factors to be about a 12 percent revolving utilization percentage. This has helped my score since my discharge and that makes logical sense to me.

But what will always be arbitrary bs to me is how removing a negative item can possibly hurt a score.

[2GreenThumbs]

---

@Anonymous wrote:

Seriously, check out the rebuilding forum and post your situation. It’s not hard to get into the low to mid 600s very quickly. 

---

+100...

These forums are full of those of us who've come back from BK with the help of the rebuilding forums.  Lots of good stuff there.

[Shooting-For-800]

If you really want some help and possible answers, include everything that is on all three reports on here so others can actually see what is going on and give you some advise.

The numbers are based on computations not a dart board.

You can get over 600 quickly if you are doing what you should be doing and your cr are acurate.

I went from BK to 745 fico8 score with $200k+ available credit in less than 5 years.

There is life after BK.

[Anonymous]

---

@Anonymous wrote:
Hi Saeren. Thank you for your reply and suggestions. I will check out the rebuilding forums.

My aggravation comes from how arbitrary this system is. I have 5 credit cards with 4100 in total available credit that I use to pay my utilities month after month and pay the balance before it's due but after the statement generates.

This factors to be about a 12 percent revolving utilization percentage. This has helped my score since my discharge and that makes logical sense to me.

But what will always be arbitrary bs to me is how removing a negative item can possibly hurt a score.

---

It may have been something else that dropped the score. If you are looking at credit monitoring alerts, the score changes reflected are often not actually generated because of those alerts but rather a new score came with the alert. I dropped FICO monitoring for this reason. 

What you need in order to optimize your score is 3 credit card accounts and 1 installment loan. You want two cards reporting $0 and one card not reporting more than 8.9% and the installment loan to be reporting under 8.9% as well. This is the optimal FICO formula and it’s the ticket to success many on this very forum have found. 

The score swing could have been due to age factors or it’s possible that the age of that account pushed you over an average or oldest threshold. If it was a FICO alert, it’s quite possible it was something else entirely. 

[Anonymous]

@saeren

This is perhaps where I'm getting confused. Another site (credit sesame) suggested I get 6 credit cards) which I have.

I have the following:

Credit one (limit 2000)
Merrick bank (limit 600)
Capital one (limit 500)
First premier (limit 400) oldest account
Milestone MC (limit 300)
Reflex MC (limit 500)

I wouldn't mind doing away with the milestone mastercard or the reflex master card.

I honestly wouldn't mind doing away with first premier either but that's my oldest credit account. (Only about 4 months).

I realize that the card I was removed from was a year plus old account.

My concern is that if I cancel any of these cards, will that have the potential to hurt my score drastically if I were to shift to the optimal FICO model you suggest?

[Anonymous]

Yeah Credit Sesame and the other apps are all in it for the marketing. The more cards they refer you to, the more money they get. 

Closing accounts doesn’t hurt your AAoA because closed items stay on your credit report for up to 10 years before falling off and your AAoA will continue to go up with it. The drop off after the 10 years is where it can hurt if you don’t have additional accounts to buffer it. 

The reason why three cards is ideal is because FICO has a penalty for 50% of cards having a balance and a penalty for all cards at 0%. 

Then your ideal usage is no more than 8.9% aggregate and 28.9% individual although many do notice a score bump for individual card utilization lower than 28.9%, myself included, so 1%-8.9% is a good target. 

I would get rid of the cards with the highest fees. Keep in mind that the optimal formula of 3 cards and 1 installment just means that having those at a minimum guarantees the best scoring benefit, having more doesn’t hurt but it doesn’t really help other than thickening your file later. If you have high fee cards, trim a few. Mind your utilization though - you don’t want to kick your utilization up because you closed some cards. 

[Anonymous]

I am going to have the mods move this to rebuilding for you, I think you can do with the advice of the experts there. I sort of fell into my rebuild on my own but if I had the help of those gurus, I would have been done rebuilding in 2016 and just be waiting for my BK to fall. 

[Anonymous]

I really appreciate your thoughtful feedback! Yes please feel free to move this, mods. However I have copied and pasted this in another forum in the rebuilding section. They could move this there and do away with the other one. Whichever works best.

Again, thank you