Credit Limit Increase and Credit Score Drop

[Anonymous]

Hey, a NFCU Visa go up from $13500 to $15500 but my score went down a point? 0 balance on it currently. Does any one know the explanation? My overall credit balance ratio improved so not sure what happened. Thanks!

[Anonymous]

The 1 point drop was caused by something else.  The only time that a CLI could cause a score drop is in the really odd corner case of a CC limit being raised to some obscenely high level, like 50k or more.  When that happens some models drop the card altogether from your total credit limit.  

And as a side note, a one point change is just noise anyway.  Sort of like a minute difference in a chemistry experiment that is run twice.  There could have been tiny bit of grit in the test tube or a million orther things that led to the difference. 

[Anonymous]

I agree with everything CGID said above.  The CLI you got definitely didn't result in your score going down a point.  A lot of times things change on your profile that aren't easily seen at the same exact time as a notable event (like your CLI), which can give you the false impresson that it was the notable event that caused the change.

[xenon3030]

I think, the actual credit score numeric value is a real number instead of an integer number. Let's consider a real number of 743.5045 as a credit score. At the time that it would be reported to the customer, it either would be rounded (744) or truncated (743). Therefore, some small changes in the credit profile should result +/-1 variation in the integer credit score. This variation is not noise, miscalculation or error. It is just because an integer number needs to be reported and the slight variation in the real number can be slightly exaggerated.

Therefore, ignore +/-1 variations. If seeing larger variations, look for the possible reasons.

[Anonymous]

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@xenon3030 wrote:

I think, the actual credit score numeric value is a real number instead of an integer number. Let's consider a real number of 743.5045 as a credit score. At the time that it would be reported to the customer, it either would be rounded (744) or truncated (743). Therefore, some small changes in the credit profile should result +/-1 variation in the integer credit score. This variation is not noise, miscalculation or error. It is just because an integer number needs to be reported and the slight variation in the real number can be slightly exaggerated.

Therefore, ignore +/-1 variations. If seeing larger variations, look for the possible reasons.

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What leads you to believe that the above is true?

[xenon3030]

Why do you think that it cannot be true? The credit score numbers should be generated by computer programs and they should not be integer in the calculation steps due to lots of parameters that need to be considered in the calculation steps (only integer in the final report because nobobdy likes a credit score of e.g. 765.4321).

[Anonymous]

Hey Xenon.  I don't think BBS said your conjecture couldn't be true.  He asked why you thought it was true.  That's a bit different. 

Glad you are here and contributing to the forums.

[Anonymous]

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@xenon3030 wrote:

Why do you think that it cannot be true? The credit score numbers should be generated by computer programs and they should not be integer in the calculation steps due to lots of parameters that need to be considered in the calculation steps (only integer in the final report because nobobdy likes a credit score of e.g. 765.4321).

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I didn't say that it couldn't be true, but I guess my real underlying question is not whether or not it is true, what's the relevance either way?

I mean, if a credit score is going to tick +/- 1 point in whole number values, does it really matter if the actual score is a long decimal that's rounded up or down or not?  Either way, what we see is what we see and the end result is going to be the same thing, that is, a score that may fluctuate +/- 1 point with seemingly nothing changing on one's credit profile. 

[xenon3030]

I think, I am wrong. I used EX simulator and if I do CLI, it shows -4-5 Fico8 score drop. What is the reason?

[Anonymous]

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@xenon3030 wrote:

I think, I am wrong. I used EX simulator and if I do CLI, it shows -4-5 Fico8 score drop. What is the reason?

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The simulator is wrong.  A CLI would not result in a score drop.  The only way that would be possible is if two things happened as a result of the CLI.  One, the CLI brought the limit of the card to an amount so high that FICO disregarded it from utilization all together. This amount wouldn't be any lower than $50k, but could be higher, say $60k+.  Two, if the algorithm did exclude this high credit line, it would have to result in aggregate utilization then crossing a threshold.  That being said, if aggregate utilization does cross a threshold, a change of 4-5 points wouldn't be possible; The change would be greater than that.  And, if the monster credit limit that received a CLI in this illustration was your only card reporting a balance and it resulted in it being excluded from utilization meaning that all zero balances were reported, the score drop would be more like 15-25 points, so again, a 4-5 point change wouldn't be possible really under any circumstances that I can think of here.  The bottom line is that you can't trust simulators.