Experian score dropped 36 points

[Anonymous]

Guys I applied for a chase freedom unlimited about 2 weeks ago my EQ went down 3 points and my EXPERIAN went down seven. My capital one card has a limit of 600 cl and recently went up another 500 so now it's 1100 so I wad like cool but today I got an alert from my fico and too my surprise my experian score fell 36 points. Please tell me why the would drop muy score that far when my credit limit Arthur up and my utilization is 0 makes no sense and when my chase freedom reports my CL is $9000 is it gonna drop again. I thought that the more available credit you have with 0 utilization your scores should go up not down. Please some explain this to me.

[Anonymous]

I've read that zero utilization will cause a score drop. You need to let at least one card report with a small balance.

[Anonymous]

Really that makes no sense. Seem like you would reward the responsible credit card user. But 36 points that's crazy why punish someone for doing crazy on there credit.

[Anonymous]

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@Anonymous wrote:
Really that makes no sense. Seem like you would reward the responsible credit card user. But 36 points that's crazy why punish someone for doing crazy on there credit.

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It makes sense, you just need to understand how the FICO scoring system works.  If you aren't allowing a balance to report on at least 1 credit card, you aren't using your revolving utilization in the eyes of FICO.  The system won't give you credit for using your revolvers if you don't allow one to report a small balance.  This does not need to be a large amount.  A few dollars is usually more than sufficient; $5 is definitely enough. 

You are correct that lower utilization is better than higher utilization.  With respect to scoring, this statement is true except for ZERO utilization, meaning that all balances reported are $0. 

Utilization has no memory, so any points gained or lost can be returned to the previous state as quickly as the former balance reports.  All you need to do is let one of your two cards report a small balance and you'll get those 36 points back instantly.

Going forward, continue to pay in full both of your credit cards, just allow one of the two to report a small balance.

In the future, you may want to add a third credit card to your wallet, as with 3 you can maximize scoring by allowing 1 of 3 to report a small balance.  This would be 33% of your cards, which is less than half which maximizes scoring.  Right now with 1 of 2 cards reporting, you are AT 50% cards reporting, which on most profiles results in a slightly lesser score than if less than 50% of cards are reporting balances.

[Anonymous]

Ok BrutalBodyShots I understand know I have 3 revolving Credit Cards right know the chase freedom will be the 4th and Will report next month I will let the capital one card carry a balance of $5. Let me ask one more thing have been paying of the balance every week is that good or bad, I have heard people say that's good but I do it anyways because it keeps me on track not to overspend. I use the card the same as cash to pay all my monthly expenses.

[Anonymous]

You're net reduction in points on your score will be greater than 3pts, because of the hard inquiry, and the new account which drags down average age of credit accounts. - this is not the huge metric.  A 30 pt drop w one CB is steep, so I would call them.  Optimum utilization is really around 10% not 0%.  Why do you have 0% utiliization?

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@Anonymous wrote:
Guys I applied for a chase freedom unlimited about 2 weeks ago my EQ went down 3 points and my EXPERIAN went down seven. My capital one card has a limit of 600 cl and recently went up another 500 so now it's 1100 so I wad like cool but today I got an alert from my fico and too my surprise my experian score fell 36 points. Please tell me why the would drop muy score that far when my credit limit Arthur up and my utilization is 0 makes no sense and when my chase freedom reports my CL is $9000 is it gonna drop again. I thought that the more available credit you have with 0 utilization your scores should go up not down. Please some explain this to me.

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[Revelate]

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@Anonymous wrote:
Ok BrutalBodyShots I understand know I have 3 revolving Credit Cards right know the chase freedom will be the 4th and Will report next month I will let the capital one card carry a balance of $5. Let me ask one more thing have been paying of the balance every week is that good or bad, I have heard people say that's good but I do it anyways because it keeps me on track not to overspend. I use the card the same as cash to pay all my monthly expenses.

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If it works for you it's no problem.  It may look a little wierd on some lender's abuse algorithms but end of the day it's more important to not overspend, and that should be an easy line to sell to a lender if an issue does occur.

End of the day, the pink line is what's important.

[Revelate]

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@Anonymous wrote:

You're net reduction in points on your score will be greater than 3pts, because of the hard inquiry, and the new account which drags down average age of credit accounts. - this is not the huge metric.  A 30 pt drop w one CB is steep, so I would call them.  Optimum utilization is really around 10% not 0%.  Why do you have 0% utiliization?

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@Anonymous wrote:
Guys I applied for a chase freedom unlimited about 2 weeks ago my EQ went down 3 points and my EXPERIAN went down seven. My capital one card has a limit of 600 cl and recently went up another 500 so now it's 1100 so I wad like cool but today I got an alert from my fico and too my surprise my experian score fell 36 points. Please tell me why the would drop muy score that far when my credit limit Arthur up and my utilization is 0 makes no sense and when my chase freedom reports my CL is $9000 is it gonna drop again. I thought that the more available credit you have with 0 utilization your scores should go up not down. Please some explain this to me.

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Assuming that siggy is current, 795 -> 765 or whatever is easy for all zeros; optimum scoring is something like <9% and on as few of revolvers possible; personally I just leave $20 on a single tradeline when I need to get pretty for an app... some small balance (not $1-4 as some lenders may round that down to zero to not cut a statement) just non-zero, what it is doesn't really matter.

Actually between an inquiry fading and letting a balance report, this was my own testing (didn't mean to get the inquiry messing up the data but c'est la vie), and this is with a tax lien on my report too... OP's clean file should get whacked harder.

Score	5/1/17	5/6/17	Delta
EX FICO 8	704	734	30
EX FICO 9	717	771	54
EX FICO 8 AU	709	745	36
EX FICO 9 AU	726	773	47
EX FICO 8 BC	723	755	32
EX FICO 9 BC	723	770	47

[Anonymous]

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@Anonymous wrote:
Ok BrutalBodyShots I understand know I have 3 revolving Credit Cards right know the chase freedom will be the 4th and Will report next month I will let the capital one card carry a balance of $5. Let me ask one more thing have been paying of the balance every week is that good or bad, I have heard people say that's good but I do it anyways because it keeps me on track not to overspend. I use the card the same as cash to pay all my monthly expenses.

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Sounds good.  Keep in mind, you don't need to "carry" a balance to make this work.  Carrying a balance suggests always keeping it there and possibly paying interest.  By allowing a small balance to report, you don't need to carry a balance, just to let one report. 

As for the second part of your question, it can be argued both ways that multiple payments are a good thing or that single payments are better.  In the end after the smoke clears, I honestly don't think it matters too much.  From the perspective of CLIs, if your intent is to grow any one of your cards I'd suggest not doing multiple payments, as it allows your balance to grow to a greater percentage of your credit limit which in some cases can aid in attaining a CLI.  If you don't care about growing a card, multiple smaller payments I'm sure is just fine as well.

[Anonymous]

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@Revelate wrote:

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@Anonymous wrote:
Ok BrutalBodyShots I understand know I have 3 revolving Credit Cards right know the chase freedom will be the 4th and Will report next month I will let the capital one card carry a balance of $5. Let me ask one more thing have been paying of the balance every week is that good or bad, I have heard people say that's good but I do it anyways because it keeps me on track not to overspend. I use the card the same as cash to pay all my monthly expenses.

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If it works for you it's no problem.  It may look a little wierd on some lender's abuse algorithms but end of the day it's more important to not overspend, and that should be an easy line to sell to a lender if an issue does occur.

End of the day, the pink line is what's important.

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What do you mean by the abuse statement? I don't understand?