Exp score dropped 16 points

[Jnbmom]

Just got an alert my daughters score dropped 16 points ONLY change her utilization went from 3% to 2%. Just ticks me off makes zero sense and yes I went line for line short profile And yes still has a balance on discover and navy makes ZERO sense 

[CH-7-Mission-Accomplished]

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@Jnbmom wrote:

Just got an alert my daughters score dropped 16 points ONLY change her utilization went from 3% to 2%. Just ticks me off makes zero sense and yes I went line for line short profile And yes still has a balance on discover and navy makes ZERO sense 

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Going from 3% to 2% would never cause a drop in a FICO score -- on any model.   I don't know what else is on her reports (if anything) but what I do see is that that AU account went from reporting a small balance to reporting a zero balance and there is an all zero penalty if nothing is reported on at least one AU account if they are present.   (I think this is dependent on the FICO version).    I bet you this is your answer.

[Jnbmom]

@CH-7-Mission-Accomplished 

Yes the Apple Card is the only AU on her account as disco and navy are hers . This is get FICO 8 and thanks for the explanation 👍

I never thought there was a zero penalty on AU accounts alone. What a crock 🤬

[CH-7-Mission-Accomplished]

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@Jnbmom wrote:

@CH-7-Mission-Accomplished 

Yes the Apple Card is the only AU on her account as disco and navy are hers .

I never thought there was a zero penalty on AU accounts alone. What a crock 🤬

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I agree with the "crock" comment, but FICO has a lot of quirks (hey, here's one:  How about you pay down your installment loan to 8% of the original loan amount and you get 25 points!   And then three or four months later you pay off the loan completely and you lose all of those  points because FICO has determined that paying off a loan is riskier than paying it down to 8%!).  I long ago gave up expecting FICO scores to make sense or be "fair"; I just focus on learning all of its quirks and trying to keep FICO happy.   It's a lot like a marriage.

[Jnbmom]

@CH-7-Mission-Accomplished 

Yes I get the quirks and crocks when it comes to FICO but never knew about the AU in the equation, I appreciate your help 

[SouthJamaica]

I can assure you that her aggregate utilization dropping from 3% to 2% did not cause her score to drop.  There's something else you're missing.

[SouthJamaica]

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@Jnbmom wrote:

@CH-7-Mission-Accomplished 

Yes the Apple Card is the only AU on her account as disco and navy are hers . This is get FICO 8 and thanks for the explanation 👍

I never thought there was a zero penalty on AU accounts alone. What a crock 🤬

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Glad to see you and @CH-7-Mission-Accomplished figured it out.

[Jnbmom]

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@SouthJamaica wrote:

I can assure you that her aggregate utilization dropping from 3% to 2% did not cause her score to drop.  There's something else you're missing.

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Yes I was sure that didn't cause it , didn't realize the AU into the equation.

[SouthJamaica]

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@Jnbmom wrote:

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@SouthJamaica wrote:

I can assure you that her aggregate utilization dropping from 3% to 2% did not cause her score to drop.  There's something else you're missing.

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Yes I was sure that didn't cause it , didn't realize the AU into the equation.

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The first time I read about that separate all zero penalty on AU cards, I was skeptical that it existed. That seemed a little (a) far fetched and (b) irrational, even for the stranger outposts of the FICO algorithms.

Then I actually tested it with an AU, and found that it really did exist, and that the penalty was far from nominal.

[CH-7-Mission-Accomplished]

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@SouthJamaica wrote:

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@Jnbmom wrote:

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@SouthJamaica wrote:

I can assure you that her aggregate utilization dropping from 3% to 2% did not cause her score to drop.  There's something else you're missing.

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Yes I was sure that didn't cause it , didn't realize the AU into the equation.

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The first time I read about that separate all zero penalty on AU cards, I was skeptical that it existed. That seemed a little (a) far fetched and (b) irrational, even for the stranger outposts of the FICO algorithms.

Then I actually tested it with an AU, and found that it really did exist, and that the penalty was far from nominal.

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I've thought about this before, and what to me is most interesting is that that AU account is obviously adding at least those 11 points to the profile.   If you were to completely remove that AU account (and not have it simply update to "terminated" and moved to the closed accounts section), you would lose at least those points.   FICO can't give you an all zero penalty for an AU account if you don't have one.   But obviously that AU account is helping you, at least when it reports a small balance.  

(This is a lot like the argument that says that when you gain those 25 points for a 92% paid off installment loan, and then lose them when the loan pays off, it is explained as you received a "bonus" for hitting that mark, but then they took away the "bonus.")  

I have never met anyone who loses 10+ points from their FICO score and thinks of it as a loss of a bonus.  It's disheartening and potentially damaging if you had borderline scores.