ivleaf wrote: Thanks for replying P- I have 2 cards. One has 40% utilitzation and the other was dropped to 20% utilization. Does that still warrant a fico score decrease?
Not sure; I'm guessing something else also changed on your reports. That's odd. I'd be tempted to place them side by side and go line by line to find the discrepancy.
I stole that chart from someone else here, but it has been a good predictor of how utilization affects scoring.
Your utilization chart shows that the CRA's are looking out for the credit card companies and lenders and NOT the consumers. It's sad, but it is the CC's and lenders paying the CRA's the big bucks.
There are a couple of key points to keep in mind:
First, we are not a customer to the CRA's. Their customer is the lender, and we are just an annoyance that must be responded to because of consumer finance protection laws. History and my own experience shows that the CRA's couldn't care less about you and I. We are a product to be packaged and marketed in risk categories.
Second, the scoring algorithm is based on past behavior of similar profiles. So if a large number of people carrying 40 to 80 percent balances historically defaulted, then carrying that balance will lower your score. If history shows that people who don't use credit cards might have trouble making regular payments on a loan, then zero balances ding your score. The only reason scores work as a predictor of future behavior is because they are based on past behavior of people whose credit report looked just like ours. They don't care how fair or unfair it is to us, just whether its predictions are statistically accurate.
The good news is we can manipulate that system. If we know what they are looking for, then we can make ourselves look better for an application. I gave up complaining about the game a long time ago, and decided I was better off playing to win.
