Hopelessly Lost

[Anonymous]

I guess I am incredibly stupid, because I simply cannot understand the basis for why my credit score fluctuates as it does. I normally make most of my charges on one card and ususally pay it off each month ~ but there is always several hundred dollars on the card because of the fact that I normally charge something every few days.

Recently, I charged a small amount (under $50) on two additional cards and my score dropped from 744 to 740!

Does anyone have the foggiest idea why my score would do that? 

[rubaty]

How many cards do you have?  My understanding is that if you have any type of balance on more than half of your cards, FICO doesnt like it.

[haulingthescoreup]

Probably as your balances shift up and down, they are crossing over certain percentages of their credit limits --10% or 50% or whatever. This flips the score up and down. And as rubaty said, it also might be how many of your cards are showing balances at any one time.

It can be maddening to see happen and try to understand why, but do realize that four or five points on credit scores around 740 are generally pretty meaningless. The difference might be if you were applying for a mortgage or auto loan, and you needed a specific score to qualify for a better rate.

Your best bet is to make payments online to get your balances below 10% (or paid off) a few days before the statement is due, so that you control what reports.

[Anonymous]

Thanks for both of your replies....in answer to your one question, I have a lot of credit cards - probably 20 or more with large credit limits...some as high as $10,000 or $20,000 each...I realize all these credit cards are probably way bad although I don't have a mortgage or car payment.

However, although I have a lot of credit cards, as I mentioned earlier, I generally charge only on one Visa  ... $500 - $600 a month...and the card's limit is $20,000 and I generally pay it off each month. Recently, I charged a small amount - like $50 on two previously dormant cards, both which had limits of at least $5,000...and my score drops four points! I realize that's not a huge drop, but its just irritating...know what I mean?

I've paid off that whopping $100 on those two cards and have yet to see a corresponding drop in my credit score....I guess I just give up on trying to understand it all!

Thanks for the replies

[haulingthescoreup]

There's no problem in having lots of open CC's as long as you can keep track of them all. One thing that might have happened when you blew the dust off that older one is that you got a small ding for a previously inactive card reporting. But you have to do that every now and again, or the CCC will probably close the card. I guess to prevent that, you would have to pay it off before it reports. That way, the issuer will be happy, but it won't rock the boat on your scores.

Fun, isn't it?

[Anonymous]

Oh yes, waaaaay fun this all is ~ At time I feel as if I'm in the Army, negotiating a mine field or something!

[Anonymous]

i have a few cc too. i didnt use them for a couple of months. my report came back saying ( no activity) so i lost points for no using my credit cards. i hadnt used them for like 6 months. also make cc payments online and before the ( closing date) . on my fico reports, it talks about making payments before the closing  date  all through it

[Anonymous]

(Remember, even if you pay your credit cards in full each month, the balance shown on your credit report may not be $0. Instead, it will reflect your account balance at the time your lender supplied the update to the credit reporting agency.)

[Anonymous]

Thanks again to everyone for their replies ~ as I said earlier, I truly am baffled by the credit scoring system ~ especially to the reply that said if I don't use all my credit card its counted as no activity and I get dinged! Go figure!

One more question, if everyone can stand my dumbness on this all!

Its taken me four years to drag my credit from the mud to where its now around 748 or so (give or take a couple of points) yet I have a lot of late payments still on my report, eventhough they were four years in the past.

If I finance a car and they pull my credit report, will the finance company mainly look at my score now, which is fairly decent, or will those late payments four years ago factor negatively into the finance company's decision?

Thanks ~

[Anonymous]

Negotiate the deal on the car with the dealer, then get the financing yourself from a bank or credit union. I do not care what is on your report. If you do the financing through the dealer you can bet they are going to use everything they can find or think of to get you the highest rate you will accept. They make money on this deal and every single one of them play this game no matter what they tell you. If you have a 4 year history of no late or missed payments they should bend over backwards to sell you a car. Its secured debt.