20 point drop in FICO score year over year

[loser362426]

I check my FICO scores yearly and checked them today 1/3/2016 and was surprised to see an approximate 20 point drop in the 3 scores. No late payments or other issues reported. The only negative is I have no non-mortgage loans (which I have not had for 5 yrs since I paid off my car loan) and I do not have a mortgage and no reported activity on my revolving accounts (I pay off my credit cards as I accumulate a balance thoughout the month to avoid interest and to keep me honest) but I have done this for the past 5 yrs. Any thoughts?

9/1/2014    1/3/2016
810                 786
811                 781
814                 789

[Anonymous]

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@loser362426 wrote:

I check my FICO scores yearly and checked them today 1/3/2016 and was surprised to see an approximate 20 point drop in the 3 scores. No late payments or other issues reported. The only negative is I have no non-mortgage loans (which I have not had for 5 yrs since I paid off my car loan) and I do not have a mortgage and no reported activity on my revolving accounts (I pay off my credit cards as I accumulate a balance thoughout the month to avoid interest and to keep me honest) but I have done this for the past 5 yrs. Any thoughts?

9/1/2014    1/3/2016
810                 786
811                 781
814                 789

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There's no way to know for sure without having the credit reports from the two dates and comparing them in detail.  (Not the scores but the reports.) 

A fair guess, however, is that in 9/2014 you had at least one card reporting a balance.  It might have been only one card and it could have been a very small balance.  But if you did, FICO would have liked that a lot.  FICO likes it when you show that at least one card has a balance (and in fact FICO likes it best when it is only one).

Now, by way of contrast, all your cards are reporting a $0 balance (according to what you write above). 

That's easily enough to account for the substantial drop.

[bdhu2001]

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@Anonymous wrote:

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@loser362426 wrote:

I check my FICO scores yearly and checked them today 1/3/2016 and was surprised to see an approximate 20 point drop in the 3 scores. No late payments or other issues reported. The only negative is I have no non-mortgage loans (which I have not had for 5 yrs since I paid off my car loan) and I do not have a mortgage and no reported activity on my revolving accounts (I pay off my credit cards as I accumulate a balance thoughout the month to avoid interest and to keep me honest) but I have done this for the past 5 yrs. Any thoughts?

9/1/2014    1/3/2016
810                 786
811                 781
814                 789

---

There's no way to know for sure without having the credit reports from the two dates and comparing them in detail.  (Not the scores but the reports.) 

A fair guess, however, is that in 9/2014 you had at least one card reporting a balance.  It might have been only one card and it could have been a very small balance.  But if you did, FICO would have liked that a lot.  FICO likes it when you show that at least one card has a balance (and in fact FICO likes it best when it is only one).

Now, by way of contrast, all your cards are reporting a $0 balance (according to what you write above). 

That's easily enough to account for the substantial drop.

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Another guess would be that in addition to one card reporting a balance, you've change scoring buckets. But as previous poster wrote, there is no way to know w/o direct comparison of reports.

[loser362426]

Thanks for the replies. Pretty much as I suspected. I'll take the drop of the scores versus having a CC balance.

[SouthJamaica]

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@loser362426 wrote:

I check my FICO scores yearly and checked them today 1/3/2016 and was surprised to see an approximate 20 point drop in the 3 scores. No late payments or other issues reported. The only negative is I have no non-mortgage loans (which I have not had for 5 yrs since I paid off my car loan) and I do not have a mortgage and no reported activity on my revolving accounts (I pay off my credit cards as I accumulate a balance thoughout the month to avoid interest and to keep me honest) but I have done this for the past 5 yrs. Any thoughts?

9/1/2014    1/3/2016
810                 786
811                 781
814                 789

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They're not reporting "no reported activity", they're just reporting a zero balance by the time the statement cut.

You'd probably pick up a couple of points by having a nominal balance on one of them when the statement cut.

You'd probably pick up 5 or 10 points by taking out a $500 secured savings loan with Alliant Credit Union and immediately paying it down to 10%.

But with your scores, why sweat it? You're already on the level that you can get the optimum rate for whatever you want. And you're going to pick up points with the passage of time, and concomitant lengthening of average age of accounts and age of oldest account. So I wouldn't change a thing if I were you, except for the sport

[NRB525]

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@loser362426 wrote:

 no reported activity on my revolving accounts (I pay off my credit cards as I accumulate a balance thoughout the month to avoid interest and to keep me honest) but I have done this for the past 5 yrs. Any thoughts?

9/1/2014    1/3/2016
810                 786
811                 781
814                 789

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I hope you understand how a credit card works? If your balance on a card is zero at January 1, and you don't have any prior balances on the card, when you make new charges onto the card during January, that can report on the January 30 statement (assuming a January 30 statement date... work with me here) and would be "Payment Due" on about February 20-25 time period.

If you pay all those January charges, which printed on the January statement, by that February 20-25 due date, there would be no interest cost on those January charges.

You could also keep using the card during February, and THOSE charges would not have interest cost, and you'd pay them by March 20-25 time frame.

I would say after 5+ years of "paying immediately" it may be time to trust yourself with credit cards

Let at least one card report balances. Your score will improve.

Pay in full by the payment due date on the statement. You won't pay any interest.

Good luck!

[elim]

Compare the 6 reports from 1 year apart.   Look for number of accounts on each. May be old positive accounts falling off as it sounds like you aren't doing much applying for credit these days. If you are then that would be a score drop also (AAoA, Inq's, etc.).

I have many positive accounts falling off this year (lost another last week) and my scores will surely take some hits.