Experian Fico 8 Score dropped 49 points

[Anonymous]

Allow 1 (and only 1) of your cards to report a balance (let the statement cut with a balance owed). The balance can THEN be paid off if you want. You may be seeing that you owe balance(s) on your card(s), but if you are paying them all BEFORE your statement cuts, and dont allow 1 of them to report a balance to the credit reporting agencies, you are losing points because they are not seeing the usage.

Make sense?

[Anonymous]

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@Anonymous wrote:
That seems more reasonable. So in total I see myself having 4 new accounts in the next 12 months. Meaning a 200 point drop.
Sounds crazy.

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No this will not happen but expect a drop of 30 to 65 pts when you are done, over all I expect mine will go down due to carrying 0% apr balances for 12 months and a new intstallment loan of $12,500,  my UTI will go up which will drop my score. But my scores will go back up since i will be in the garden (not applying for credit for a allow)  and making payments and UTI will slowly go down. Unsure if I will recover all my pts that dropped but I do expect to be back in the high 700s or maybe 800s in a year or so 

[Anonymous]

Wow. That makes total sense. Nerve thought if it like that.

[Anonymous]

Just like the other person told me. I should let credit card report balances as long as I do not exceed the utilization rate of maybe 9%.

[Anonymous]

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@Anonymous wrote:
That seems more reasonable. So in total I see myself having 4 new accounts in the next 12 months. Meaning a 200 point drop.
Sounds crazy.

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If one sees a 50 point drop from the opening of one account, they will not see a 200 point drop (50 x 4) if they open 4 accounts.  They wouldn't even see that if they opened 10-15 accounts.  Like many things credit-related, diminishing returns come into play.  There is not a directly proportional relationship between number of accounts opened and score drop, so that's not something to ever worry about.

[Anonymous]

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@Anonymous wrote:
Just like the other person told me. I should let credit card report balances as long as I do not exceed the utilization rate of maybe 9%.

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Yes lower UTI is just one factor that helps with credit score, the lower the better. Good example here 

[Anonymous]

The new credit card has reported a balance. This balance actually made my utilization rate at 18% overall but this IS NOT reflected in the credit bureaus yet. I wonder if that’s the reason for any score to drop so much.

[Anonymous]

FenderGuy, I actually think that's a very poor graphic and really misleading, as what is "spent" isn't relevant at all.  $800 "spent" on a $4000 limit is no different than $800 "spent" on a $2000 limit.  What matters is reported balance which of course yields utilization percentage.

One can spend (say) $16,000 on a $2000 limit card in a cycle if they make a $800 purchase every day and immediately pay it off 20 days in a row.  Then at the end of the cycle they leave behind $100 to report, resulting in 5% utilization.  I think too often people fall into thinking that they can only use [spend] less than (say) 30% of their credit limit to remain in a good place and confuse that with the amount that's reported on the account, when in terms of Fico scoring the reported balance is what matters.

[Anonymous]

The graphic should say “reported balance” instead of “spent”.

[Anonymous]

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@Anonymous wrote:

FenderGuy, I actually think that's a very poor graphic and really misleading, as what is "spent" isn't relevant at all.  $800 "spent" on a $4000 limit is no different than $800 "spent" on a $2000 limit.  What matters is reported balance which of course yields utilization percentage.

One can spend (say) $16,000 on a $2000 limit card in a cycle if they make a $800 purchase every day and immediately pay it off 20 days in a row.  Then at the end of the cycle they leave behind $100 to report, resulting in 5% utilization.  I think too often people fall into thinking that they can only use [spend] less than (say) 30% of their credit limit to remain in a good place and confuse that with the amount that's reported on the account, when in terms of Fico scoring the reported balance is what matters.

This is just a simple example of UTI showing if one spent an AMT on the CL they have; what the UTI would be at the moment, dont over read.

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