Caught with my FICO pants down

[Anonymous]

I have a revolving charge account with a $1,200 limit that I haven't used in about six months, and it had a zero balance all of that time. Well, I decided to buy a $65 pair of pants and the FICO gods dinged me with nine points off my Experian and eight points off TU --- Equifax wasn't impacted -- as soon as that $65 balance was shown on my monthly statement, which will be paid off to a zero balance again by the due date.

Other than the true ridiculousness of losing that many pioints off my FICO score for having the nerve to buy myself a pair of pants, my question is: Will my scores rebound to where they were previously once that $65 balance is paid back down to zero? Or will this pair of pants continue to cost me a lower score for months to come?

[Kree]

To the best of my knowledge, this is mostly likely a point lose due to the percentage of revolving accounts with balances.  As with all things FICO, scores are generated based upon the current data, including accounts with balances.   Once reported at 0, your score should recover any points.

Things to consider.

1.  The point loss might be unrelated to this particular account change, just happened at the same time.

2. If something else changes around the same time as this account reports zero, you might have a different score than what you had before.

[Anonymous]

Thanks, I hadn't thought about the accounts with balances part of the equation. I have credit monitoring through MiFico and it sends me an alert for every little change. So the points were definitely lost due to the pants purchase. I'll be paying those off ASAP. I'm trying to buy a house in couple of months so every point helps.

[Kree]

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@Anonymouswrote:

Thanks, I hadn't thought about the accounts with balances part of the equation. I have credit monitoring through MiFico and it sends me an alert for every little change. So the points were definitely lost due to the pants purchase. I'll be paying those off ASAP. I'm trying to buy a house in couple of months so every point helps.

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MyFICO does not actually send alerts for every little change.  There is a list somewhere around here for what triggers an alert and what doesn't. The list is different for each CRA.   Example of something not alerted,  if an old account drops off of your report.

But, the number of points points towards it being accounts with balances, as it is similar to the numbers people report for using the AZEO method of score maximization.

[Thomas_Thumb]

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@Anonymouswrote:

I have a revolving charge account with a $1,200 limit that I haven't used in about six months, and it had a zero balance all of that time. Well, I decided to buy a $65 pair of pants and the FICO gods dinged me with nine points off my Experian and eight points off TU --- Equifax wasn't impacted -- as soon as that $65 balance was shown on my monthly statement, which will be paid off to a zero balance again by the due date.

Other than the true ridiculousness of losing that many pioints off my FICO score for having the nerve to buy myself a pair of pants, my question is: Will my scores rebound to where they were previously once that $65 balance is paid back down to zero? Or will this pair of pants continue to cost me a lower score for months to come?

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If your card is a true charge card it will not factor into revolving credit utilization. However, it is included in # of open accounts reporting balances. If this represents an increase in # of accounts with balances score could drop by 8 points due to this factor. Also, cards that have not been used in 5 to 6 months or more may be considered inactive. Others have reported a drop in score when an inactive card is used and reports a balance. Again, the reported drop for this was in the 5 to 10 point range.

As others have mentioned, utilization and # cards reporting have no history. Impact on score is point in time. Impact on score is strictly affected by current state of the attribute at the time the data is pulled from the CRA. Impact of an inactive account reporting after a long hibernation would be short term - if it impacts score.

A change in file status that triggers pulling new data to generate an updated score often is not the underlying cause of a score change. It is always prudent to look at all data in your file as something else may have changed. 

[NRB525]

OP what were your scores before and after the wardrobe malfunction?

[Anonymous]

Wardrobe malfunction -- that's a good one!

Previous scores were TU 621; EX 658; EQ 659 --- these are Fico 8

[NRB525]

What is putting your scores in the mid-600’s?

Any baddies?

What does utilization on all your cards look like?

[Anonymous]

I've brought them up from the low 500s in the past several months working toward buying a home. I was able to pay-to-delete several old collections from utilities and get goodwill forgiveness on a 30-day late to a credit card. Still have five 30-day lates on there and TU has a collection that's a couple years old from a payday loan outfit. Utilization has gone from all cards being maxed out to under 30 percent on most and zero balances on some. So, after doing all that work and raising my scores by 80 to 100 points, any downward change -- especially one resulting from something as simple as buying a piece of clothing -- creates a great deal of anxiety for me.

[Anonymous]

Well, what important to realize is that any utilization-related score change of X number of points would be exactly reversed if you reversed the utilization event that caused the drop in X points.  So, a $65 balance reporting caused your score to drop X, you would gain X back as soon as that $65 balance reported back to what it was prior ($0, presumably).