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Huge 50 Point Dip in Credit Score

TexasPit
Visitor

Huge 50 Point Dip in Credit Score

I recently paid off a 12k Consolidation loan and the last 4k my wife and I owed on a car. Then we applied for a house and got approved. My wife’s dropped about 5 points. She went from 802 to 797. My scored dropped almost 50 points. I went from 734 to 685. I currently have the same mix of cards and loans that my wife has. We have the same 6 credit cards which we share that have no balance with about 18k open. We also both have two school loans a piece. She owes 12k and I owe 20k. No one at Fico or Experian can tell why my score dropped so hard. The only thing I can think of is the consolidation loan because that’s the only thing on my credit report that I have that she doesn’t. I only had the loan open for two months before I paid it off.  The housing market where I live is nuts right now. I’m scared I’m not going to find a house within the next 90 days, they’re going to rerun my credit again and it’s going to affect my loan. It just seems crazy to me that I’m getting penalized so hard just for being more financially stable. Any help or advice would be greatly appreciated. Thanks.

17 REPLIES 17
nwa479
Contributor

Re: Huge 50 Point Dip in Credit Score

Sorry to hear about the 50 point drop.   Not sure if I can help you pinpoint the problem but I'll try. I have a few questions

 

1.  You said you and your wife share the same six cards. Do you both just have the same cards or are you an AU on any of hers?   If they are all paid to zero then you may have an All Zero Penalty.   One of your cards needs to report a balance and if it's an AU card one of those also needs to report to avoid the All Zero penalty for Fico 8.  For mortgage scores it will treat the AU the same so no need for both to have a balance to optimize mortgage scire

 

2. What type of score dropped?  Was it Fico 8?  Or a mortgage score?

3. Do you have your latest middle mortgage score?  

4. Mortgage scores are also sensitive to new accounts and inquiries.  How many new accounts within the last year and new inquiries?  This wouldn't explain the drop but it may help optimize your MMS 

 

Im working on trying to increase mortgage scores also.  I'm currently stuck at a 660 MMS but have increased my score recently by improving CC utilization and achieving AZEO.  

 

 

 


Starting Scores: 595 to 610 in Sept 2016
Current Scores: Fico8 EQ722 TU660 EX672 Fico9 EQ803 TU726 EX730 Mortgage Scores EQ660 TU648 EX660
Goal Score: Fico8s 750s Fico9s 800s Mortgage Scores above 680


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Message 2 of 18
Remedios
Moderator

Re: Huge 50 Point Dip in Credit Score

@TexasPit  just to confirm, all your cards show $0.00 on your report? 

When someone asks you *What's wrong*, and you're not sure if you want to start listing it in alphabetical or in order of importance.
Message 3 of 18
SouthJamaica
Super Contributor

Re: Huge 50 Point Dip in Credit Score


@TexasPit wrote:

I recently paid off a 12k Consolidation loan and the last 4k my wife and I owed on a car. Then we applied for a house and got approved. My wife’s dropped about 5 points. She went from 802 to 797. My scored dropped almost 50 points. I went from 734 to 685. I currently have the same mix of cards and loans that my wife has. We have the same 6 credit cards which we share that have no balance with about 18k open. We also both have two school loans a piece. She owes 12k and I owe 20k. No one at Fico or Experian can tell why my score dropped so hard. The only thing I can think of is the consolidation loan because that’s the only thing on my credit report that I have that she doesn’t. I only had the loan open for two months before I paid it off.  The housing market where I live is nuts right now. I’m scared I’m not going to find a house within the next 90 days, they’re going to rerun my credit again and it’s going to affect my loan. It just seems crazy to me that I’m getting penalized so hard just for being more financially stable. Any help or advice would be greatly appreciated. Thanks.


1. What scores are you talking about?

 

2. From what source are you getting your information about the scores?

 

3. What do you mean you share the cards?

 

4. You say you applied for a house and got approved. Then you say you haven't found a house. I don't understand these two statements, they seem to contradict each other.

 

5. What were the original loan amounts on the student loans?

 

6. What was the original loan amount on the consolidation loan and what was the balance before you paid it off?

 

7. What were the original loan amount and balance before payoff on the car loan?

 

We need this information in order to answer your question.


Total revolving limits 653000 (575000 reporting) FICO 8: EQ 716 TU 747 EX 715

Message 4 of 18
Ultros
New Member

Re: Huge 50 Point Dip in Credit Score

Some possibilities I can think of:

 

If it's your only loan, paying it off will remove your score bonus for having an installment loan at low utilization, which is how SSLs work. If your wife has other loans, her score won't drop. https://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Adding-an-installment-loan-the-Share-Sec...

 

Also, all zero penalty, as already explained by other posters.

Message 5 of 18
TexasPit
Visitor

Re: Huge 50 Point Dip in Credit Score


@nwa479 wrote:

Sorry to hear about the 50 point drop.   Not sure if I can help you pinpoint the problem but I'll try. I have a few questions

 

1.  You said you and your wife share the same six cards. Do you both just have the same cards or are you an AU on any of hers?   If they are all paid to zero then you may have an All Zero Penalty.   One of your cards needs to report a balance and if it's an AU card one of those also needs to report to avoid the All Zero penalty for Fico 8.  For mortgage scores it will treat the AU the same so no need for both to have a balance to optimize mortgage scire

 

2. What type of score dropped?  Was it Fico 8?  Or a mortgage score?

3. Do you have your latest middle mortgage score?  

4. Mortgage scores are also sensitive to new accounts and inquiries.  How many new accounts within the last year and new inquiries?  This wouldn't explain the drop but it may help optimize your MMS 

 

Im working on trying to increase mortgage scores also.  I'm currently stuck at a 660 MMS but have increased my score recently by improving CC utilization and achieving AZEO.  

 

 

 



It was my Fico 8 score that went from 734 to 685. I have 3 cards in my name and 3 cards in hers. Then we are authorized users on each others cards. 4 of those 6 cards have small balances with none being more than $20. 2 of the cards are a $0 balance. My Fico 2 was a 715 when they ran it. Now it’s at 697. Thanks for the reply.

Message 6 of 18
TexasPit
Visitor

Re: Huge 50 Point Dip in Credit Score


@Remedios wrote:

@TexasPit  just to confirm, all your cards show $0.00 on your report? 



My 6 credit cards are as follows. $20.56, $15.14, $14.06, $5.00 , $0, $0. and then I have 2 school loans for 10k each. Both only have about 3% paid off.

Message 7 of 18
TexasPit
Visitor

Re: Huge 50 Point Dip in Credit Score


@SouthJamaica wrote:

@TexasPit wrote:

I recently paid off a 12k Consolidation loan and the last 4k my wife and I owed on a car. Then we applied for a house and got approved. My wife’s dropped about 5 points. She went from 802 to 797. My scored dropped almost 50 points. I went from 734 to 685. I currently have the same mix of cards and loans that my wife has. We have the same 6 credit cards which we share that have no balance with about 18k open. We also both have two school loans a piece. She owes 12k and I owe 20k. No one at Fico or Experian can tell why my score dropped so hard. The only thing I can think of is the consolidation loan because that’s the only thing on my credit report that I have that she doesn’t. I only had the loan open for two months before I paid it off.  The housing market where I live is nuts right now. I’m scared I’m not going to find a house within the next 90 days, they’re going to rerun my credit again and it’s going to affect my loan. It just seems crazy to me that I’m getting penalized so hard just for being more financially stable. Any help or advice would be greatly appreciated. Thanks.


1. What scores are you talking about?

 

2. From what source are you getting your information about the scores?

 

3. What do you mean you share the cards?

 

4. You say you applied for a house and got approved. Then you say you haven't found a house. I don't understand these two statements, they seem to contradict each other.

 

5. What were the original loan amounts on the student loans?

 

6. What was the original loan amount on the consolidation loan and what was the balance before you paid it off?

 

7. What were the original loan amount and balance before payoff on the car loan?

 

We need this information in order to answer your question.



It was my Fico 8 score that went from 734 to 685. I have 3 cards in my name and 3 cards in hers. Then we are authorized users on each others cards. 4 of those 6 cards have small balances with none being more than $20. 2 of the cards are a $0 balance. I’m getting all my information from Experian. At Credit Karma my scores only dropped a couple points which I expected because I applied for a home loan which was a hard hit. I got pre-approved for a home loan so when I’m making offers on houses the Seller knows I can back up the offer I make. The students loans were 20k and I’ve barely paid anything on them. The consolidation loan was over 12k. It was just recently reconsolidated before I paid it off. I only made 2 payments. The first month and then I paid it off. The car was about a 17k loan. I paid on it for almost 4 years and then paid the last 4k off. I only had 3 changes before the drop in score. 1)I paid off the car (4k). 2) I paid off the consolidation loan (12k). 3) I applied for a house (300K). Thanks for the reply.

Message 8 of 18
TexasPit
Visitor

Re: Huge 50 Point Dip in Credit Score


@Ultros wrote:

Some possibilities I can think of:

 

If it's your only loan, paying it off will remove your score bonus for having an installment loan at low utilization, which is how SSLs work. If your wife has other loans, her score won't drop. https://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Adding-an-installment-loan-the-Share-Sec...

 

Also, all zero penalty, as already explained by other posters.


I really feel it has to do with the loan. It's the only difference between my credit report and my wifes. I just don't get why the hit was so huge. Thanks for the info.

Message 9 of 18
SouthJamaica
Super Contributor

Re: Huge 50 Point Dip in Credit Score


@TexasPit wrote:

@SouthJamaica wrote:

@TexasPit wrote:

I recently paid off a 12k Consolidation loan and the last 4k my wife and I owed on a car. Then we applied for a house and got approved. My wife’s dropped about 5 points. She went from 802 to 797. My scored dropped almost 50 points. I went from 734 to 685. I currently have the same mix of cards and loans that my wife has. We have the same 6 credit cards which we share that have no balance with about 18k open. We also both have two school loans a piece. She owes 12k and I owe 20k. No one at Fico or Experian can tell why my score dropped so hard. The only thing I can think of is the consolidation loan because that’s the only thing on my credit report that I have that she doesn’t. I only had the loan open for two months before I paid it off.  The housing market where I live is nuts right now. I’m scared I’m not going to find a house within the next 90 days, they’re going to rerun my credit again and it’s going to affect my loan. It just seems crazy to me that I’m getting penalized so hard just for being more financially stable. Any help or advice would be greatly appreciated. Thanks.


1. What scores are you talking about?

 

2. From what source are you getting your information about the scores?

 

3. What do you mean you share the cards?

 

4. You say you applied for a house and got approved. Then you say you haven't found a house. I don't understand these two statements, they seem to contradict each other.

 

5. What were the original loan amounts on the student loans?

 

6. What was the original loan amount on the consolidation loan and what was the balance before you paid it off?

 

7. What were the original loan amount and balance before payoff on the car loan?

 

We need this information in order to answer your question.



It was my Fico 8 score that went from 734 to 685. I have 3 cards in my name and 3 cards in hers. Then we are authorized users on each others cards. 4 of those 6 cards have small balances with none being more than $20. 2 of the cards are a $0 balance. I’m getting all my information from Experian. At Credit Karma my scores only dropped a couple points which I expected because I applied for a home loan which was a hard hit. I got pre-approved for a home loan so when I’m making offers on houses the Seller knows I can back up the offer I make. The students loans were 20k and I’ve barely paid anything on them. The consolidation loan was over 12k. It was just recently reconsolidated before I paid it off. I only made 2 payments. The first month and then I paid it off. The car was about a 17k loan. I paid on it for almost 4 years and then paid the last 4k off. I only had 3 changes before the drop in score. 1)I paid off the car (4k). 2) I paid off the consolidation loan (12k). 3) I applied for a house (300K). Thanks for the reply.


1. The loss of the mostly-paid-off car loan may have cost you points.

2. The payoff of the barely-paid-off consolidation loan would not have cost you points.

3. Applying for a mortgage would cost you points.

4. Since you have 3 cards in your name and 3 AU cards you are subject to 2 possible all zero penalties. To avoid that you'd want to make sure that one of your cards and one of your AU cards each report a small balance, while the other 4 cards report zero balances. Perhaps you got 2 all zero penalties, and she got none.

5. Perhaps you and  your wife are on different scorecards, due to factors which have nothing to do with your present finances.


Total revolving limits 653000 (575000 reporting) FICO 8: EQ 716 TU 747 EX 715

Message 10 of 18
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