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Paying down CC $, but scores dropping, too. What am I doing wrong?

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Anonymous
Not applicable

Paying down CC $, but scores dropping, too. What am I doing wrong?

After years of poor choices, I've been working to pay down debt and repair my credit ahead of my first home purchase.  I've been focused and tracking progress since the start of the summer and using this forum as continued motivation.  So I couldn't wait to get my 3B report this morning hoping to see new gains.  Instead, my mortgage scores declined.  I'm feeling pretty defeated right now.  I've been working toward the pre-approval process in December/January, but now fear I may need more time (which is okay).  My lender wants me to be at a 720 middle mortgage score to put 5% down. I've consistently paid down credit card debt, but my FICO8 scores started to drop in October, and then my 3B confirmed my fears that it's impacted my mortgage scores, too.  Any advice on what could be contributing to the drop or what I should focus on to continue to move the mortgage score need? I've been paying enough so that monthly balances are always lower and in some cases, crossing utilization thresholds. 

 

Overall, I've been working to get my aggregate utilization under 28% (not there yet), individual utilizations below 48%, then 28%, and then 0 for as many cards as possible. My FICO8 scores started in the low to mid 600's in the spring and my aggregate utilization was about 70%.  I've paid off about $25k in CC balances so far and noted below which additional accounts will be at 0 next week.  That will just leave my two large Chase CCs I've been throwing as much extra money at as possible.  

 

I can't figure out why my EX mortgage score went up, but my EQ & TU dropped as I've paid down balances!

 

FICO8/Mortgage (Change from 9/30 to 10/31):

EQ: 711 (+2) /691 (-14)

TU: 714 (-3)  /696  (-7)

EX: 725 (+6) /697 (+37)

 

Aggregate Utilization as of 10/31:  EQ: 35%, TU: 36%, EX: 34%

AAoA: 6 years 

Chase/Southwest    9753/15700 = 62% utilization 

Chase/United           5751/12000 = 48% utilization 

BankofAmerica Via 1965/7000 = 28% utilization (will be 0 next week)

Barclays/American  291/3850 = 8% utilization  (will be 0 next week) 

CapitalOne                  13/2500 = <1% utilization (already 0)

Comenity/WS:          121/1100 = 11% utilization  (will be 0 next week) 

Dsnb/Macys             144/2600 = 6% utilization (will be 0 next week)

American Express       0/1000

Citi/BestBuy                0/1000

TD/Target                   0/1000

Citi/HomeDepot        0/2000

Synchrony/Banana   0/300

 

Toyota Lease: 6226 (lease ends July 2021)

Student loans: 71k 

 

Negative Items:

WF charge-off of $3,700 last updated 8/2018.  I settled for less.  TU shows this as paid after charge-off. EQ shows this as charge-off with 0 balance and 120 day delinquency. Should I try to get that changed to paid or does it matter?

 

Toyota Motor Leasing has a 30 day past due in 8/2017 reported by all 3. 

 

Student loans -- 30 day late payment in Fall 2019.

 

I've read up on AZEO. I've been working toward it and hope to have just the larger chase CC left by end of December.  What am I missing?  Any additional advice? Thanks in advance.  This forum has helped educate me.

 

 

 

 

 

 

 

12 REPLIES 12
Anonymous
Not applicable

Re: Paying down CC $, but scores dropping, too. What am I doing wrong?

Hello,

 

I saved this to help me with paying debt down. It may work for you. It's from @AllZero . You may check his or her profile to see what other gems have been posted. 

 

Remember these aggregate utilization thresholds: 8.9%, 28.9%, 48.9%, 68.9%, 88.9%
Remember these individual utilization thresholds: 28.9%, 48.9%, 68.9%, 88.9%

Using the above as a guide, you will want to focus on lowering the utilization on the maxed out card(s) (88.9% and above) to a more suitable level.

 

The other goal is to zero out as many revolving accounts as possible. Older scoring models like AZEO.

 

In addition, see if you can get 28.9% or under aggregate utilization.

 
Message 2 of 13
AllZero
Mega Contributor

Re: Paying down CC $, but scores dropping, too. What am I doing wrong?

Excellent advice from @Anonymous 

 

@Anonymous  Not knowing your profile, I don't have an exact answer in regards to your question. You'll have to go through your reports line by line and review the before and after. Look for any discrepancies.

 

Each time you cross a utilization threshold, you should see score gains.

 

WIth your number of revolvers, you may get away with ~25% of accounts reporting a balance, e.g. AZE3; 3 out of 12 before crossing a scoring threshold. This holds true for EX2. I presume it is the same for TU4 and EQ5 if it follows the older scoring algorithm.

 

You have the correct game plan. Pay down your aggregate utilization to 28.9% or under, then 8.9% or under.

 

Individual utilization-wise, what is holding you back 62% and 42% accounts.

 

You should see a score increase when you go AZE2 and your report updates.

 

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 rev.5.17.20

Message 3 of 13
Anonymous
Not applicable

Re: Paying down CC $, but scores dropping, too. What am I doing wrong?

Appreciate the motivation.  I know this is a marathon, not a sprint. I've definitely been following all the rules I've learned through reading this forum. I haven't missed payments, added any new accounts or added inquiries. I've been paying hundreds over the minimum payments.

@AllZero I'm hoping to see some movement as I get to AZE2 this month.  I've gone from above 70% aggregate utilization to 35% now.  I should be below 28% by end of December with a goal of getting my two remaining CCs to 28% and 48% by January. I just hope I don't see any more point drops in the interim.  I'll update you on my progress after this next round of payoffs.   I also learned a fun fact this weekend.  My student loan lender stopped reporting to credit bureaus to help borrowers struggling to pay their loans.  But in the process, they also stopped reporting good payment history.  So I've missed out on 7 months of continued good payment history for those loans which is frustrating.  They said they will start reporting again this month, but they are unsure if they will start with November or report payment history over the past 7 months as well.  

Message 4 of 13
AllZero
Mega Contributor

Re: Paying down CC $, but scores dropping, too. What am I doing wrong?

@Anonymous  You know your target utilization numbers. That is great. We wait in anticipation with you in regards to the score updates. I think your 720 goal score is achievable once you get your utilization down. Good work on getting your aggregate utilization down from 70% to 35%. Just pay down as planned. Come December should be a good month for you score wise.

 

I am not well versed in student loans and how they report. It is my understanding that open accounts with "data unavailable" or "ND, No Data" still counts for positive account history?

Message 5 of 13
Anonymous
Not applicable

Re: Paying down CC $, but scores dropping, too. What am I doing wrong?

Thanks @AllZero. and OMG. I think I know what happened. I was going through the mail today and had a new CC! A month ago, Chase asked me if I wanted to upgrade my Southwest Air Visa from preferred to priority which came with a few additional benefits because of my spending. It wasn't a new account, same #, same limit, etc. I didn't think anything of it and  I didn't see a new inquiry. Could this have triggered a new account? It doesn't show as new on any of my reports though. But maybe?

Message 6 of 13
AllZero
Mega Contributor

Re: Paying down CC $, but scores dropping, too. What am I doing wrong?

@Anonymous  If on a derogatory score card, one does not get a new account penalty. Which is a nice bonus for being on such a score card.

 

However, new accounts still lower your AAoA Average Age of Accounts and AoYRA Age of Youngest Revolving Account either being on a derogatory or non-derogatory score card.

 

Maybe it's something else?

Message 7 of 13
Anonymous
Not applicable

Re: Paying down CC $, but scores dropping, too. What am I doing wrong?


@Anonymous wrote:

Thanks @AllZero. and OMG. I think I know what happened. I was going through the mail today and had a new CC! A month ago, Chase asked me if I wanted to upgrade my Southwest Air Visa from preferred to priority which came with a few additional benefits because of my spending. It wasn't a new account, same #, same limit, etc. I didn't think anything of it and  I didn't see a new inquiry. Could this have triggered a new account? It doesn't show as new on any of my reports though. But maybe?


If you just did a product change of your CC, and it does not create a new account, it should not be considered a new account (which you do not get a penalty for, anyway) and should not affect your AAoA, either, since it is the same account. I do not think it was the upgrade that caused the change.

Message 8 of 13
Anonymous
Not applicable

Re: Paying down CC $, but scores dropping, too. What am I doing wrong?

Thanks @Anonymous and @AllZero. Well, I will keep at it and see what happens this month! 

Message 9 of 13
Anonymous
Not applicable

Re: Paying down CC $, but scores dropping, too. What am I doing wrong?


Hi everyone. I'm looking for confirmation of my thinking here as I work to pay down CC debt to achieve a higher MMS. For my next big move, I have about $5k available to make immediate payments to my cards.  Wanted to make sure I'm doing this in the most optimal way.  I plan to split the money to get my highest CC to <48% and my next highest to <28%.  Together, that will also lower my aggregate utilization to <28% for the first time in a long time! I have one more CC that has a balance <25% of individual utilization.  I could shift some money to lower that to <8%  but from what I've read in these forums, it seems I would get more impact by lowering the individual utilizations for  the 2 higher CC balances to the next thresholds. Anyone feel differently (looking at you @AllZero )! Am I missing a move that would potentially deliver points toward my mortgage score? I don't think I'll get to AZEO (or AZE2/3) soon, but still working toward. Latest balances and scores below.  

 

FICO8/Mortgage (Change from 9/30 to 10/31):

EQ: 711 (+2) /691 (-14)

TU: 714 (-3)  /696  (-7)

EX: 725 (+6) /697 (+37)

 

Aggregate Utilization as of 10/31:  EQ: 35%, TU: 36%, EX: 34%

AAoA: 6 years 

Chase/Southwest    9753/15700 = 62% utilization  (could get to 48%)

Chase/United           5751/12000 = 48% utilization  (could get to 28%)

BankofAmerica Via 1765/7000 = 25% utilization  

Barclays/American   0/3850 

CapitalOne                  0/2500 

Comenity/WS:            0/1100 

Dsnb/Macys               0/2600 

American Express     0/1000

Citi/BestBuy               0/1000

TD/Target                   0/1000

Citi/HomeDepot        0/2000

Synchrony/Banana   0/300

 

Toyota Lease: 6226 (lease ends July 2021)

Student loans: 71k 

 

 

@Anonymous wrote:

After years of poor choices, I've been working to pay down debt and repair my credit ahead of my first home purchase.  I've been focused and tracking progress since the start of the summer and using this forum as continued motivation.  So I couldn't wait to get my 3B report this morning hoping to see new gains.  Instead, my mortgage scores declined.  I'm feeling pretty defeated right now.  I've been working toward the pre-approval process in December/January, but now fear I may need more time (which is okay).  My lender wants me to be at a 720 middle mortgage score to put 5% down. I've consistently paid down credit card debt, but my FICO8 scores started to drop in October, and then my 3B confirmed my fears that it's impacted my mortgage scores, too.  Any advice on what could be contributing to the drop or what I should focus on to continue to move the mortgage score need? I've been paying enough so that monthly balances are always lower and in some cases, crossing utilization thresholds. 

 

Overall, I've been working to get my aggregate utilization under 28% (not there yet), individual utilizations below 48%, then 28%, and then 0 for as many cards as possible. My FICO8 scores started in the low to mid 600's in the spring and my aggregate utilization was about 70%.  I've paid off about $25k in CC balances so far and noted below which additional accounts will be at 0 next week.  That will just leave my two large Chase CCs I've been throwing as much extra money at as possible.  

 

I can't figure


@Anonymous wrote:

After years of poor choices, I've been working to pay down debt and repair my credit ahead of my first home purchase.  I've been focused and tracking progress since the start of the summer and using this forum as continued motivation.  So I couldn't wait to get my 3B report this morning hoping to see new gains.  Instead, my mortgage scores declined.  I'm feeling pretty defeated right now.  I've been working toward the pre-approval process in December/January, but now fear I may need more time (which is okay).  My lender wants me to be at a 720 middle mortgage score to put 5% down. I've consistently paid down credit card debt, but my FICO8 scores started to drop in October, and then my 3B confirmed my fears that it's impacted my mortgage scores, too.  Any advice on what could be contributing to the drop or what I should focus on to continue to move the mortgage score need? I've been paying enough so that monthly balances are always lower and in some cases, crossing utilization thresholds. 

 

Overall, I've been working to get my aggregate utilization under 28% (not there yet), individual utilizations below 48%, then 28%, and then 0 for as many cards as possible. My FICO8 scores started in the low to mid 600's in the spring and my aggregate utilization was about 70%.  I've paid off about $25k in CC balances so far and noted below which additional accounts will be at 0 next week.  That will just leave my two large Chase CCs I've been throwing as much extra money at as possible.  

 

I can't figure out why my EX mortgage score went up, but my EQ & TU dropped as I've paid down balances!

 

FICO8/Mortgage (Change from 9/30 to 10/31):

EQ: 711 (+2) /691 (-14)

TU: 714 (-3)  /696  (-7)

EX: 725 (+6) /697 (+37)

 

Aggregate Utilization as of 10/31:  EQ: 35%, TU: 36%, EX: 34%

AAoA: 6 years 

Chase/Southwest    9753/15700 = 62% utilization 

Chase/United           5751/12000 = 48% utilization 

BankofAmerica Via 1965/7000 = 28% utilization (will be 0 next week)

Barclays/American  291/3850 = 8% utilization  (will be 0 next week) 

CapitalOne                  13/2500 = <1% utilization (already 0)

Comenity/WS:          121/1100 = 11% utilization  (will be 0 next week) 

Dsnb/Macys             144/2600 = 6% utilization (will be 0 next week)

American Express       0/1000

Citi/BestBuy                0/1000

TD/Target                   0/1000

Citi/HomeDepot        0/2000

Synchrony/Banana   0/300

 

Toyota Lease: 6226 (lease ends July 2021)

Student loans: 71k 

 

Negative Items:

WF charge-off of $3,700 last updated 8/2018.  I settled for less.  TU shows this as paid after charge-off. EQ shows this as charge-off with 0 balance and 120 day delinquency. Should I try to get that changed to paid or does it matter?

 

Toyota Motor Leasing has a 30 day past due in 8/2017 reported by all 3. 

 

Student loans -- 30 day late payment in Fall 2019.

 

I've read up on AZEO. I've been working toward it and hope to have just the larger chase CC left by end of December.  What am I missing?  Any additional advice? Thanks in advance.  This forum has helped educate me.

 

 

 

 

 

 

 



out why my EX mortgage score went up, but my EQ & TU dropped as I've paid down balances!

 

FICO8/Mortgage (Change from 9/30 to 10/31):

EQ: 711 (+2) /691 (-14)

TU: 714 (-3)  /696  (-7)

EX: 725 (+6) /697 (+37)

 

Aggregate Utilization as of 10/31:  EQ: 35%, TU: 36%, EX: 34%

AAoA: 6 years 

Chase/Southwest    9753/15700 = 62% utilization 

Chase/United           5751/12000 = 48% utilization 

BankofAmerica Via 1965/7000 = 28% utilization (will be 0 next week)

Barclays/American  291/3850 = 8% utilization  (will be 0 next week) 

CapitalOne                  13/2500 = <1% utilization (already 0)

Comenity/WS:          121/1100 = 11% utilization  (will be 0 next week) 

Dsnb/Macys             144/2600 = 6% utilization (will be 0 next week)

American Express       0/1000

Citi/BestBuy                0/1000

TD/Target                   0/1000

Citi/HomeDepot        0/2000

Synchrony/Banana   0/300

 

Toyota Lease: 6226 (lease ends July 2021)

Student loans: 71k 

 

Negative Items:

WF charge-off of $3,700 last updated 8/2018.  I settled for less.  TU shows this as paid after charge-off. EQ shows this as charge-off with 0 balance and 120 day delinquency. Should I try to get that changed to paid or does it matter?

 

Toyota Motor Leasing has a 30 day past due in 8/2017 reported by all 3. 

 

Student loans -- 30 day late payment in Fall 2019.

 

I've read up on AZEO. I've been working toward it and hope to have just the larger chase CC left by end of December.  What am I missing?  Any additional advice? Thanks in advance.  This forum has helped educate me.

 

 

 

 

 

 

 


 

Message 10 of 13
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