Re: Do you think I got put into a different bucket... - myFICO® Forums

Anonymous · ‎01-14-2009

I am at a loss here to figure out what is going on. I paid off a a credit card that had a small balance on it...$160.00 and no other changes at all have taken place since my last TU report I pulled a couple of weeks ago and my score went down. Anyone have any ideas what is going on? I am going to assume that maybe I switched buckets? I still have balances left on my last two cards and I am going to pay one off and leave $10.00 on the other...but dang I hope my score does not go down again. If I have been re-bucketed is that going to make it harder for me to get my score up?

haulingthescoreup · ‎01-15-2009

If nothing new and bad has popped up, the only thing that would trigger a re-bucketing is an increase in AAoA or in longest history, or if something like the last baddie fell off, or the last serious baddie.

Any differences on the two credit reports, other than the balance decrease?

* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007

Anonymous · ‎01-15-2009

nope nothing at all has changed...I really just don't get it at all......I am more curious as to why than being mad about it now...but my big fear is that it will go down more when I pay down my last two cards....of course I don't know why it would!!!

CreditAble · ‎01-15-2009

@Anonymous wrote:
I am at a loss here to figure out what is going on. I paid off a a credit card that had a small balance on it...$160.00 and no other changes at all have taken place since my last TU report I pulled a couple of weeks ago and my score went down. Anyone have any ideas what is going on?
I have some ideas but more info would be needed to confirm. First of all making a vague statement about scores going down gives no clue as to what might be happening. A 6 to 10 point drop is easiest to explain in some situations. I have experienced some unexplainable score drops with TU myself involving a paid off installment loan.

If the score drop was 6 - 10 points or so, post balances and CLs and I will try to take a shot at the explanation. I know for a fact that I can lose points by paying off a $160 balance on my credit cards. What was the credit limit on the card?

If you don't choose to post the info, you can try an experiment. Pay off all cards to have $0 closing balances. Then allow $160- $200 report as a closing balance on the card you mentioned. Then check your scores. You may have discovered your "sweet spot" balance for maximum credit scores.

My sweet spot is about $150 - $200.

In my case $200 is far below 1% of my available credit. The often quoted 1-9% utilization guideline is not an absolute carved in stone "11th Commandment". Generally below 9% utilization generates reasonably high scores. I have always found 7%-8% worked best for me. In order to achieve maximum scores however, the balance on one credit card might have to be greater than 0 but less than 1%.

Depending upon your credit limits, I would consider the "sweet spot anomaly" as a possible reason for your score drop. My issue with the low end of the 1-9% rule of thumb for utilization, is my own "contrarian hobby horse" that I ride in these forums.

ByrdMan used the term "sweet spot" in ThisThread.

Message Edited by CreditAble on 01-15-2009 01:39 PM

Anonymous · ‎01-15-2009

@CreditAble wrote:
@Anonymous wrote:
I am at a loss here to figure out what is going on. I paid off a a credit card that had a small balance on it...$160.00 and no other changes at all have taken place since my last TU report I pulled a couple of weeks ago and my score went down. Anyone have any ideas what is going on?
I have some ideas but more info would be needed to confirm. First of all making a vague statement about scores going down gives no clue as to what might be happening. A 6 to 10 point drop is easiest to explain in some situations. I have experienced some unexplainable score drops with TU myself involving a paid off installment loan.

If the score drop was 6 - 10 points or so, post balances and CLs and I will try to take a shot at the explanation. I know for a fact that I can lose points by paying off a $160 balance on my credit cards. What was the credit limit on the card?

If you don't choose to post the info, you can try an experiment. Pay off all cards to have $0 closing balances. Then allow $160- $200 report as a closing balance on the card you mentioned. Then check your scores. You may have discovered your "sweet spot" balance for maximum credit scores.

My sweet spot is about $150 - $200.

In my case $200 is far below 1% of my available credit. The often quoted 1-9% utilization guideline is not an absolute carved in stone "11th Commandment". Generally below 9% utilization generates reasonably high scores. I have always found 7%-8% worked best for me. In order to achieve maximum scores however, the balance on one credit card might have to be greater than 0 but less than 1%.

Depending upon your credit limits, I would consider the "sweet spot anomaly" as a possible reason for your score drop. My issue with the low end of the 1-9% rule of thumb for utilization, is my own "contrarian hobby horse" that I ride in these forums.

I don't know if this helps but I went from 25% utilization to 22% ...the card had a 500.00 limit. I have for cards only two reporting balances now and I will be paying the last two down probably one to 0 balance and the other to about 10.00 they both have small credit limits.

CreditAble · ‎01-15-2009

wildcat wrote:

I don't know if this helps but I went from 25% utilization to 22% ...the card had a 500.00 limit. I have for cards only two reporting balances now and I will be paying the last two down probably one to 0 balance and the other to about 10.00 they both have small credit limits.
I am assuming only a few points score drop since you didn't mention exact numbers. Since your utilization is 22%, the less than1% sweet spot is definitely not an issue.

The most import thing to consider is that you will be paying all of your outstanding balances off. That is the best practice for maximum FICO scores.

If your overall Credit limit is less than $1,000, having only $10 reporting on only one credit card at a time will definitely help your scores.

Keep in mind that occasionally using the cards to at least 50% of utility will help obtain higher credit limits. You don't have to let the 50% utilization report. You can pay the balance before the statement drops. The card companies will see your usage by their internal records and see that you could use higher credit limits.

Don't worry about the minor score drop. You definitely seem to be managing your credit responsibly.

Junejer · ‎01-15-2009

Hey wildcat, I know that you said that nothing else changed, but take out a magnifying glass and do it again. I am of the impression that there might have been some change in "status" in one of your TLs. There are hidden points in there. Please recheck the status of each of your TLs and let us know.