Getting back into the "700 club"...help please!

[Anonymous]

Hi!  First off, I am very grateful for these forums!  I'm learning so much!

Anyway, here is my situation:

I am 25 and have had credit for 4 years and 4 months.  I have two credit cards.  In my entire credit experience I have had only 2 late payments and they were both paid off IN FULL within a few days of the past due date.  I have no delinquincies on either credit card account.  Both my credit card companies say I am in outstanding standing with my accounts.  I have ALWAYS paid my balances IN FULL except for the last three months in which I've had a revolving balance of up to 50% of my total available credit (more on that below) but I continue to make regular TIMELY payments ranging from $400-800.  One time I maxed out a card and to date I have 3 TOTAL inquiries on my accounts (one for my apartment application, one for my student loan, and one for applying for my second credit card).

I should also mention that in November I took out a private student loan for $15000 with my dad as cosigner (he has rock solid credit, probably to the tune of the 800s).

In November I signed up for Chase Identity Protection to monitor my Experian score.  I started out with a 796.  I wasn't familiar with the program and didn't know I had to get a fresh credit report each month, so I just assumed for the last few months that my credit score remained at 796.  Imagine my shock when I ordered a new credit report two days ago and saw my score had plummeted to 722!

So I panicked.  I did some reading on the net and came to the realization that perhaps this Chase Experian score was a so-called "FAKO" score and not the real deal (The Fico).  So that's what brought me here.  ***I just checked my Equifax FICO score here and it's a 698!  Now, I know that's a different bureau (right?) so the score may be different than the Experian score, right?  So, was my Chase score just artificially inflated all along because it was a fako?

**So now for my questions:

    1) What could have caused this drop?  Would it be my high balance (about 50% of my total available credit) in the last few months?  I just can't imagine my score dropping so drastically just for a few months of a higher than usual balance...

    2) Could it be my taking out that student loan?  I know they ran a credit inquiry when I applied and I know that can ding your credit, but again I can't imagine it would hurt it THAT much.

    3) MOST IMPORTANTLY: I am planning to get very aggressive with my balance starting this weekend when I mail out a $1300 check to my credit card company to essential cut my total CC balance IN HALF.  This month I will not be using credit AT ALL and in April I will send in another $800 to bring my balance down to around $700.  Can I realistically expect my credit score to gain at least a few points by doing this?  Or what about in the next six months if I keep up this pattern of slashing my balance down and barely using my cards? I just used the credit simulator program on this site and plugged in the amount I'm planning to pay this month ($1300) and just by doing that the program said I can expect to raise my score from 708-748.  Is this realistic?  **Ultimately I want to get firmly in the 700 range in the next six months so I can be assured of receiving more private student loans when I apply for them in the fall.

[Junejer]

Hello oval, and welcome to the forums. Please read Credit Scoring 101, if you haven't already.

That EX score is a FAKO. The reason for a FAKO to go up or down, could be because it is raining outside today, or it is sunny or light or dark or any such foolishness. Who knows?

Higher util would certainly make your FICO go down. For best scoring results, have your CC report a balance of 9% or less.

Taking out the student loan will hurt you a bit too. The INQ may have cost you a few points and it reporting to your CRs, will cause your AAoA to drop, which may also cost you a few points.

You will get score bumps when your util hits 49%, 29% and 9%.

[Anonymous]

Thank you very much byrdman!  I am going ahead with my plan to pay off enough of my balance this month to reflect only 25% utilization on one card and 10% on the other.  That should help boost my score a few (or more) points come this time next month, right?  I'll also KEEP REDUCING my balance each subsequent month until it's down to no more than 10% on each card.  I estimate I can reach this goal by May and I hope that will also boost my score.

[Junejer]

Why don't you bring the one down to 26% and the other to 9%. You want 1-9%, not 10%.

Ideally, I like to have one card report a balance. My score reacts better this way.

I am going to move this thread to Understanding FICO Scoring.

[Anonymous]

Passing on something I learned here

The key number is the amount your CC sends on your statement, that's the same as the amount they report to the CRA

So even if you pay the full amount due each month your CC company will report a balance to the CRA

To get a true ZERO (or other number) you have to pay the amount due on the due date, and then make another payment right before your new statement is printed

Hopefully somebody will correct me if I have that wrong

[Junejer]

Way to go AKCheese. You are giving back. Nice going.