I'm looking for a seasoned credit analyst, who's spent lots of time with the subtleties.
So I've been trying to get myself out of a little jam...I went out of the frying pan and into the fire.
For many months in 2018, I worked to get my credit card use below 30%. It was in the mid-600s, and 700 was the goal. I did everything I could...worked extra hours, did a consolidation loan, etc. Sure enough, it went up to 717 (Transunion).
But this victory was short-lived. I hadn't properly researched account age, and really underestimated it. Being over 700, I applied for and received a few credit cards with 0% Intro APR (for balance transfers), then transferred the remaining 25% or so. I was also able to get all my other limits to skyrocket (total combined went from around 10K to 30k), thinking it would help with the 30% cushion.
Suddenly, my score plummetted back to the mid-600's (644 Experian, 646 Equifax, 667 Transunion), even with the greater limit and only 25% use. Since then, I've done obsessive research (which I tend to do) on the actual FICO. I'm well-aware of the basic percentage breakdowns (for what goes into the score), but have gone far beyond that. I've gathered a few charts from previous forums, which have been periodically disclosed by FICO, and even have an Excel document with all of these specific criteria, as well as the "excellent/good/fair/poor" ranges of criteria, used by several different credit score sites.
I'm also subscribed to www.freecreditscore.com (by Experian), and the monthly fee is well worth it to me. By comparing my scores by date, I've found some specific patterns. They seem to be in line with those charts, but not exactly the same. For example:
-The "number of credit lines with a balance above 0": when it moves from 5 to 6, it seems to go up exactly 13 points (and vice versa), but from 4 to 5 is only a few points. The chart says "5-6" is one category and "3-4" is another (15 points lower)
- The "average age of all accounts (including closed): The chart gives a clear-cut formula: once it's over 2 years, it's a total of 60 points on that subfactor. Anything below (13-23 months) is 35 points (so a 25-point difference).
I believe this is the main mistake I made when getting all these new cards: the average age went from about 27 to 22 months, so it went down. However, from what I gather, there's only a 10-point difference between 24.5 and 22.9...so it can't be that cut-and-dry. It may also be that the chart's numbers are divided in the final formula, so they don't actually make a difference of that many points.
So to my main question/point: I've been confused by the Experian simulator. It's been telling me that, to get back over 700, I need to pay down a significant portion of my balance...even though I'm using less than 30%. If my score went down because of the age, I understand only time will cure it. But if that's the case, then why is it saying that payoffs make a big difference...when the percentage used is under 30% to begin with? It's acting as if I have over 50% use all over again. I'd like to fix this...but on the flip side, I don't want to pay off a few grand for no reason, then have the score remain the same, when I could have used it for investing elsewhere.
I know that nobody knows the exact algorithms, but can anyone make sense of this?
