Did everyone's score drop just because?

[Anonymous]

Nice break down @SouthJamaica Might be a good link for the master thread! Fits almost perfectly what I was trying to put under utilization.

[SouthJamaica]

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@Anonymous wrote:

Nice break down @SouthJamaica Might be a good link for the master thread! Fits almost perfectly what I was trying to put under utilization.

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Thank you very much. I agree that something like that should appear in the master post of the FICO 8 thread, because I have noticed that it is very common for people to mix up the 3 kinds of "utilization".

[Anonymous]

Absolutely and totally agree SJ. That’s exactly why I included that in the draft and now you’ve given me something to link to for some of those points!

[NRB525]

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@Anonymous 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. 

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As noted by the other contributors, the Balance Transfers are the culprit.

No universal issue, just a well-known specific issue to this credit file. High Utilization on revolving cards is a definite score drag.

Now the question is, which banks are those maxed out balance transfers to? And the 0% card with maxed out balance?

[Anonymous]

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@SouthJamaica wrote:

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@Anonymous 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. 

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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.

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Thanks for this detailed response, which explains it well.

Three revolving cards are close to 100% individually, and it would be expensive (interest) to pay that down. Revolving aggregate is around 50% utilization now, which would also be hard to pay down to below 10%. Will try requesting credit line increases all around but expecially those maxed out if no hard pull involved.

[Remedios]

@Anonymous  getting a CLI with maxed cards is a tall order. That is probably not happening till those cards are paid down.

Also, which lenders? This is really not a good time for maxed out cards, so who are her lenders, regardless of balances?