FICO 2 - Mystery decrease

[Anonymous]

Hi all,

Long time listener, first time caller. I would consider myself reasonably fluent in the workings of credit scores and similar but by no means an expert.

In an effort to learn a little more, I have noticed that my Fico 2 has decreased 703 to 695 between Friday and today (Monday). There have been no changes, updates or similar to my report with Experian confirming this.

Could anyone point out a case in which a sub-score such as a Fico 2 would randomly decrease? I am monitoring my score daily at the moment as I am mid-mortgage application. My lender has only checked my score once and this has already been reflected in the prior 703 score. 

Thanks! 

[Anonymous]

Can you list for us all your EX inquiries in the last four months?  Be sure to give us the date of the inquiry and the inquiry type (auto, credit card, mortgage, etc.).  If the inquiry was of a certain type in reality (e.g. a mortgage inquiry) but it doesn't look like the report has coded it correctly, be sure to let us know that too.

The first thing that occurs to me is that you had a mortgage inquiry roughly 30 days ago.  On Friday it was less than 30 days old, and therefore it was ignored by FICO, but now it is > 30 days and therefore it is now affecting your score.

The de-duplication window for mortgage inquiries is also different in the EX mortgage score than it is for the other two bureaus.  The de-dupe window for EX FICO 2 is 14 days, whereas the other two mortgage scores have a much more generous window (at least 30 days, maybe 45).

[Anonymous]

That is a very good point. Essentially now the rate shopping period is over it has re-coded? All other Fico scores have remained the same.

I have one inquiry 'Credit Plus', 'Mortgage Reporters' on April 11, pretty much 30 days ago so this would make sense.

Three inquiries from October 18 for auto loans and one in April 18 for Sprint which all appear to have coded correctly. 

We have been approved for the mortgage but if I can get my Fico 2 beyond 700 our interest rate lowers substantially. Worth pointing out I emigrated to the US only three years ago so my history is against me. 

Any pointers you can provide on the following would be appreciated for boosting it:

Credit Card 1; $311/$500, 62% used (Actually zero, just needs to update)

Credit Card 2; $9400/$15500, 68% used (Actually zero, just needs to update)

Credit Card 3; $0/$5800

Auto Loan; $12,108

Never late, all good standing.

Any suggestions? 

[Anonymous]

It is wonderful that you have paid off all your CC debt.  That will help a lot.

There is, however, a small (but in your case very significant penalty) for having all your cards reporting zero (which according to what you just said will be the case very soon).

You need to get exactly one card reporting a small positive balance ($10 say) and make sure that card continues to report that small positive balance every month until you own your home -- but with the other cards reporting $0.

[Anonymous]

Got it - Keep a very small revolving balance. Thank you! 

[Anonymous]

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@Anonymous wrote:

That is a very good point. Essentially now the rate shopping period is over it has re-coded? All other Fico scores have remained the same.

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There are two windows related to mortgage inquiries. 

The first is a 30 day window.  All FICO models ignore mortgage inquiries that are 29 days of age or less.  

That 30 day window has nothing to do with rate shopping, which is the way that many mortgage inquiries (e.g. to nine different lenders) made in the same very narrow window are treated by FICO as a single inquiry.  That de-duplication window is 14 days for FICO 2 (Experian) but the other two bureaus have a bigger de-dupe window.

It sounds like what happened in your case is that you crossed the 30 day window (the first one).  The second window does not apply because you were not rate shopping, i.e. you did not get a quote and hard pull from (say) five different lenders all within 13 days of each other.  If you had, those five inquiries would be treated as one.  But that doesn't apply to you since you have had only one mortgage inquiry in the last 120 days.

[FlaDude]

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@Anonymous wrote:

Any pointers you can provide on the following would be appreciated for boosting it:

Credit Card 1; $311/$500, 62% used (Actually zero, just needs to update)

Credit Card 2; $9400/$15500, 68% used (Actually zero, just needs to update)

Any suggestions? 

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Your balances would normally update when your statement is generated (except for Chase who reports 0 balances right away). If your statement dates aren't within the next few days you can contact the lenders and ask for a mid cycle report to the CBs. As has already been mentioned, for optimal score keep a small balance (under 8.9%) one one card.