@KJones7440 wrote:I am pretty annoyed that my credit score went down by 5 pts because I don't understand why. I do not carry a balance from month to month and always pay off my statement balance so that I don't carry interest. Last month, I closed with a statement balance of just over $900, and this month I closed with a statement balance of around $1,600. The $900 from last month was paid off this billing cycle, and is not part of the $1,600. Even with this increase in Statement balance, my utilization is only at 8%. This is still very good utilization, so why would my credit score drop? If anyone has any insight, please let me know. Thanks in advance
A few comments and questions:
- Where are you getting your scores from? If the likes of CreditKarma, ignore them, they are irrelevant.
- If you are talking about a true FICO score, when you say, "My utilization is only at 8%", is that for the individual card or for your aggregate revolving credit limit?
- Regardless of how you answer the above question, I have heard anecdotal reports there is a threshold somewhere between 8.9% and 0.1%; I'm not sure if this is a real thing or not.
- In the end, unless you are about to apply for credit, the drop of 5 points is meaningless, your scores will bounce back next month.
@KJones7440 wrote:Thanks for that response. I monitor my score and activity using the MyFICO app. It's not so much that the score went down 5 pts, but rather it's the understanding of why it happened. I don't want to do something that is damaging to my credit health and repeat it because I don't understand what is contributing to it. I'm just trying to get a better understanding of what went wrong so that I can prevent it from happening in the future. The potential of a continual drain adds up pretty quickly
This falls into the category of over thinking it; the higher utilization is probably the issue, next month if you play the AZEO game (search this site), your scores will bounce back. Assuming utilization was the cause, then FICO scores have no memory.
@KJones7440 wrote:I am pretty annoyed that my credit score went down by 5 pts because I don't understand why. I do not carry a balance from month to month and always pay off my statement balance so that I don't carry interest. Last month, I closed with a statement balance of just over $900, and this month I closed with a statement balance of around $1,600. The $900 from last month was paid off this billing cycle, and is not part of the $1,600. Even with this increase in Statement balance, my utilization is only at 8%. This is still very good utilization, so why would my credit score drop? If anyone has any insight, please let me know. Thanks in advance
We can't possibly answer your question.
We would have to know what your credit limits and reported balances were the day before the score drop and the day of the score drop.
You couldn't provide that information because you don't even know what day the score changed.
