Credit scores continuously sinking in spite of better personal financial situation

[Anonymous]

I just don't get the logic behind this score system. In spite of having only one card

(Amex Gold Credit card paid off fully every month),  Experian keep lowering the score apparently because i have started to extract more frequent flier miles from the Card owners by using the card instead of cash! I'm still paying all my bills on time and have gained in financial strength other places. There is something missing in this scheme that I don't see. 

Can someone point me to the Logic applied to Experian's thinking? 

It seems like I have to become more involved wiht these guys.

Thanks 

[Anonymous]

I honestly can't help with explaining how they're thinking, but have you tried leaving a small balance (1-9%)on your card instead of PIF? Just leave it long enough for it to report to the CRAs, then PIF before you get hit with interest.

Apparently that's ideal for FICO.

[Scamp]

Welcome to the Forums, PJ! 

A couple of possibilities here...

If it's the Gold charge card (as opposed to one of their revolving cc's like the Skymiles Gold credit card) and you have the 'Sign and Travel'/'Pay Over Time' option available to you, that charge card is likely being reported like a revolving credit card, but instead of having a reported credit limit (CL) like a revolver, the highest balance reported will be substituted as your CL in calculating your debt-to-CL ratio (utilization).

If, on top of this you're paying AFTER you receive your statements (as most sensible people would), then it's likely that your REPORTED balances are close to or may even match that high balance' (since you're apparently using it fairly heavily to rack up the miles), which would create very high or maxed-out utilization on the account, which is a score killer.

PIFing faithfully doesn't help your scores unless it's done pre-statement-date, so that the amount reported to the CRA's is 0. 

If your card is one of their revolvers and you're charging it up fairly close to your CL, then paying it off after the statement cuts, the same thing would happen.

The way around this is to pay your card either in full or down to that 1-9% util the other poster mentioned, about a week or 10 days BEFORE your statement cuts, so that the REPORTED balance is 0 or something very small. 

Hope this is helpful.  Welcome again!

[Anonymous]

Make a payment before the amount posts for the statement, but do NOT pay it in full before statement date.  You need a small balance to report 1%-9%.......if you let nothing report each month you will lose more points then you have been seeing because you won't be showing your ability to use credit wisely.

An example of why you are losing so many points:  Lets say your limit is $2,000 and you charge $1,500 each month = 75% utility and a major ding on your report.

If you let $80 report of that $2K balance you will see the most benefit in your score.

[Anonymous]

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PJFargo wrote:

I just don't get the logic behind this score system. In spite of having only one card

(Amex Gold Credit card paid off fully every month),  Experian keep lowering the score apparently because i have started to extract more frequent flier miles from the Card owners by using the card instead of cash! I'm still paying all my bills on time and have gained in financial strength other places. There is something missing in this scheme that I don't see. 

Can someone point me to the Logic applied to Experian's thinking? 

It seems like I have to become more involved wiht these guys.

Thanks 

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You don't have any revolving credit?

This would explain it-

The Charge card is not considered revolving - and is not calculated in UTL.

[MattH]

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@Anonymous wrote:

I just don't get the logic behind this score system. In spite of having only one card

(Amex Gold Credit card paid off fully every month),  Experian keep lowering the score apparently because i have started to extract more frequent flier miles from the Card owners by using the card instead of cash! I'm still paying all my bills on time and have gained in financial strength other places. There is something missing in this scheme that I don't see. 

Can someone point me to the Logic applied to Experian's thinking? 

It seems like I have to become more involved wiht these guys.

Thanks 

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There is not any clearly-articulated logic to many of these things, because it's based on statistical correlations: they crunch the data on computers and ask their software to find predictors of credit problems, so they themselves probably don't know why half of these correlations work.