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Did everyone's score drop just because?

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New Member

Did everyone's score drop just because?

Does the current economic downturn make everyone less creditworthy?

I am asking because my wife's FICO score as reported on her Discover statement dropped dramatically for no apparent reason, from 758 in Feb 2020 to 719 in March to 700 in April, after being relatively steady in the 734-761 range for the past 12 months.

I just pulled a Transunion report to compare with an Equifax report of a couple months ago, and found no hard inquiries, no reduction of credit limits, no accounts closed, nothing significant happened.

The is also no obvious change in her FICO scoring factors in the last few months:

Payment history: all on time, amounts owed: decreased, length of credit history: natural increase, new credit: none, credit mix: nothing evident.

What can be going on?

Message 1 of 16
15 REPLIES 15
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Super Contributor

Re: Did everyone's score drop just because?

I'd recommend $1 you can obtain your 3 bureau FICO 8 scores and reports at Experian.com or creditchecktotal.com. Cancel in 7 day or less to avoid the re-occurring monthly charge. Wash, Rinse, and Repeat as needed.

Message 2 of 16
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Super Contributor

Re: Did everyone's score drop just because?

In addition, you can get free weekly reports at https://www.annualcreditreport.com

Message 3 of 16
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Valued Contributor

Re: Did everyone's score drop just because?

Something must have happened. To my understanding Fico score is formula based on few equations that are reported by creditors and lenders data point.

See if one of her CCs got closed!







           
Message 4 of 16
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Super Contributor

Re: Did everyone's score drop just because?


@emmawren wrote:

Does the current economic downturn make everyone less creditworthy?

I am asking because my wife's FICO score as reported on her Discover statement dropped dramatically for no apparent reason, from 758 in Feb 2020 to 719 in March to 700 in April, after being relatively steady in the 734-761 range for the past 12 months.

I just pulled a Transunion report to compare with an Equifax report of a couple months ago, and found no hard inquiries, no reduction of credit limits, no accounts closed, nothing significant happened.

The is also no obvious change in her FICO scoring factors in the last few months:

Payment history: all on time, amounts owed: decreased, length of credit history: natural increase, new credit: none, credit mix: nothing evident.

What can be going on?


1. No the economic downturn is not a scoring factor.

2. You need to compare the February and March TU reports; comparing TU to EQ doesn't help.

3. We would need to know exactly what the differences are between the two reports.


Total revolving limits 653000 (575000 reporting)

Message 5 of 16
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Valued Contributor

Re: Did everyone's score drop just because?

No, my reports went up slightly 

(720s fico8, 670s fico9)

 

I also got two new credit cards (20k, 4.5k) in the last 10 days.

 

Reports will go up and down, but I doubt they would be affected by the economy in general.

 

GL!

Rebuild started in 2014  -  $100k unsecured credit in 2017  -  $400k unsecured credit in 2020.

DON'T WORK FOR CREDIT CARDS ... MAKE CREDIT CARDS WORK FOR YOU!

5% Rotating - Discover                         5%-20% - Amazon & Lowes                   3-6% Groceries - NFCU & Amex Preferred
3-5% Gas - NFCU & Ducks Unl            4% Dining & Entertain - Savor               3% Travel & Hotels - Flagship, Propel, & Uber
2% Everything - Flagship & Syncrony






Message 6 of 16
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New Member

Re: Did everyone's score drop just because?

Thanks to all who replied. Clearly, it seems there is no universal issue here.

I checked March & April Equifax reports. No accounts closed, no hard inquiries, nothing like that. There are a lot of random blanks for monthly balances, etc, interstingly, so Equifax is not pulling data consistently.

The only possibility and unsatisfactory explanation for the score drop is that she did two balance transfers (taking advantage of 0% offers) from our home equity account to two different existing credit cards in January and February, which seem to show up delayed on the Equifax report as balances two month later (in March for the first and not yet for the second transfer). Utilization on these two cards went to ~100%, but the amounts were exactly offset by balance reductions in the home equity, so overall credit utilization should not have changed. A third card has also been maxed out much earlier (another 0% opportunity) but that has not changed much for 8 months.

Mystery really unsolved. 

Message 7 of 16
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Valued Contributor

Re: Did everyone's score drop just because?


@emmawren wrote:

Thanks to all who replied. Clearly, it seems there is no universal issue here.

I checked March & April Equifax reports. No accounts closed, no hard inquiries, nothing like that. There are a lot of random blanks for monthly balances, etc, interstingly, so Equifax is not pulling data consistently.

The only possibility and unsatisfactory explanation for the score drop is that she did two balance transfers (taking advantage of 0% offers) from our home equity account to two different existing credit cards in January and February, which seem to show up delayed on the Equifax report as balances two month later (in March for the first and not yet for the second transfer). Utilization on these two cards went to ~100%, but the amounts were exactly offset by balance reductions in the home equity, so overall credit utilization should not have changed. A third card has also been maxed out much earlier (another 0% opportunity) but that has not changed much for 8 months.

Mystery really unsolved. 


The balance on home equity loan has collateral, your house vs. revolving accounts that are unsecured. Credit scores don't calculate the utilization as whole sum even tho they displayed in some monitoring sites.







           
Message 8 of 16
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Super Contributor

Re: Did everyone's score drop just because?

Mystery solved. Individual utilization increase on revolvers to max on 2 more.

 

Bet HELOC was nowhere near max, was it? Or if was, its still pretty close to the same bracket. 

You gotta keep in mind aggregate revolving utilization is only one metric you also have individual revolving utilization.

-Our Community’s updated scoring wisdom: Link to Scoring Primer.
-For Negative Reason Codes see: CassieCard’s Score Factors thread.
-ccquest’s workbook to calculate metrics for you: Link to Workbook.

Oct 2020 New Account Scorecard.Nov 2020, No New Account Scorecard (reassignment conflated with aging. EX9 not updated yet. Oldest/avg varies. Estimates above.)
Real world mortgage maxes are: EQ5-818, TU4-839, EX2-844.


RIP:
(Everything said is JMHO and is not endorsed by FICO or MF. I have no affiliation with either, just a grateful member.)
Message 9 of 16
Super Contributor

Re: Did everyone's score drop just because?


@emmawren wrote:

Thanks to all who replied. Clearly, it seems there is no universal issue here.

I checked March & April Equifax reports. No accounts closed, no hard inquiries, nothing like that. There are a lot of random blanks for monthly balances, etc, interstingly, so Equifax is not pulling data consistently.

The only possibility and unsatisfactory explanation for the score drop is that she did two balance transfers (taking advantage of 0% offers) from our home equity account to two different existing credit cards in January and February, which seem to show up delayed on the Equifax report as balances two month later (in March for the first and not yet for the second transfer). Utilization on these two cards went to ~100%, but the amounts were exactly offset by balance reductions in the home equity, so overall credit utilization should not have changed. A third card has also been maxed out much earlier (another 0% opportunity) but that has not changed much for 8 months.

Mystery really unsolved. 


In my opinion, the mystery really is solved. She maxed out 2 cards, which is a FICO score disaster, and there was no corresponding event sufficient to take the heat off of that.

 

You are mixing together 3 completely different scoring factors:

 

1. Individual account revolving utilization

Utilization is based on reported balance, which in most but not all accounts is statement balance. The most important breakpoint is 30%. 30% or higher causes significant point loss. Optimum to keep at 28% or less to avoid rounding up.

 

2. Aggregate revolving utilization

Utilization is based on reported balances, which in most but not all accounts is statement balance. The most important breakpoint is 10%. Optimum to keep at 8.9% or less, but more points will be gained by keeping it as low as possible, so long as there is at least one account reporting a small balance.

 

3. Aggregate installment utilization

The total of all open installment loan balances divided by the total original loan amounts of those loans. Most important breakpoint is 10%. Optimum to keep at 9% or less.

 

 


Total revolving limits 653000 (575000 reporting)

Message 10 of 16
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