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After reading various topics on credit card utilization and reading a thread on these forums about a guy whose score dropped 28 points due to 0% a util report, it got me thinking.
Say your starting score is 650, and you have a zero util for one month, so your score drops 10 points to 640. If during the following month you report another zero util, does your score drop another 10 points to 630? Or does it stay the same at 640?
IF that former scenario is true, it prompts another question. Let's say after all that, during the third month, you report a util that's above zero. I understand that credit card utilization matters only month-to-month. Based on that, does it only give you back the 10 points you lost from the previous month, making it 640 again? Or, does your score increase back up to 650, like those two previous months never happened?
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Utilization scoring has no memory and is not cumulative.
@turnips1 wrote:After reading various topics on credit card utilization and reading a thread on these forums about a guy whose score dropped 28 points due to 0% a util report, it got me thinking.
Say your starting score is 650, and you have a zero util for one month, so your score drops 10 points to 640. If during the following month you report another zero util, does your score drop another 10 points to 630? Or does it stay the same at 640?
IF that former scenario is true, it prompts another question. Let's say after all that, during the third month, you report a util that's above zero. I understand that credit card utilization matters only month-to-month. Based on that, does it only give you back the 10 points you lost from the previous month, making it 640 again? Or, does your score increase back up to 650, like those two previous months never happened?
As mentioned above the UTIL (or anything else on the credit report) has no memory. The score is generated based on what is on the report at the moment the score is calculated.
As to whether or not the score will go back to where it was a month (or two) ago, it is hard to say. With all things being the same, in theory, it should go back up to where it was before... maybe even a little bit higher since there would have been a couple of months added to the AAoA - possibly?
Hope that answers your question.