My Experian FICO Score Dropped 4 Points. Why?

[Jannelo]

I am completely demoralized.  I woke up to find my FICO score decreased by 4 points, from 638 to 634.  As a rebuilder, this has really thrown me for a loop. I poured over  my credit report.  Zero has changed.   I still have three cards reporting zero balance and one card reporting a 1 percent utilization.  No new inquiries, no new accounts, no new collections.   I am current on all four of my credit cards.  My auto loan is current.  I'm even paying extra a month on prinicipal.  My charged-off account  balance owing was reduced by another $200 payment, and that was reported eight days ago.   And my FICO score never changed on Experian up or down from that.  

Can your credit score dip like this for no reason?

[Anonymous]

Something changed that caused a rescore on whichever report you’re referencing. It’s safe to say, however, that it wasn’t anything major. A 4 point fluctuation is not a sign of a major derogatory.

While those in the building/rebuilding stage can be hyper-focused on their scores, fluctuations of a few points here and there is not uncommon and not something that should cause too much angst.

[Remedios]

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@Jannelo wrote:

I am completely demoralized.  I woke up to find my FICO score decreased by 4 points, from 638 to 634.  As a rebuilder, this has really thrown me for a loop. I poured over  my credit report.  Zero has changed.   I still have three cards reporting zero balance and one card reporting a 1 percent utilization.  No new inquiries, no new accounts, no new collections.   I am current on all four of my credit cards.  My auto loan is current.  I'm even paying extra a month on prinicipal.  My charged-off account  balance owing was reduced by another $200 payment, and that was reported eight days ago.   And my FICO score never changed on Experian up or down from that.  

Can your credit score dip like this for no reason?

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There is always a reason when score drops, it just may not be obvious one. Are you paying for EX monitoring? 

I would bet that it was the update to the negative account that caused a drop.

You will recover those points, but if you can, pay this off all at once that way you only have one or two updates left, depending on a lender. As long as CO remains unpaid, but there is activity on it (even if it's positive thing such as payments), you can expect your scores to fluctuate

Good news is, once you're done with your last unpaid negative and everything is updated to reflect $0.00 balances, your scores can start gradual recovery. It's a slow(ish) process, you wont get all your points back till last negative drops off, but it will get better 

[Jannelo]

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@Remedios wrote:

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@Jannelo wrote:

I am completely demoralized.  I woke up to find my FICO score decreased by 4 points, from 638 to 634.  As a rebuilder, this has really thrown me for a loop. I poured over  my credit report.  Zero has changed.   I still have three cards reporting zero balance and one card reporting a 1 percent utilization.  No new inquiries, no new accounts, no new collections.   I am current on all four of my credit cards.  My auto loan is current.  I'm even paying extra a month on prinicipal.  My charged-off account  balance owing was reduced by another $200 payment, and that was reported eight days ago.   And my FICO score never changed on Experian up or down from that.  

Can your credit score dip like this for no reason?

---

There is always a reason when score drops, it just may not be obvious one. Are you paying for EX monitoring? 

I would bet that it was the update to the negative account that caused a drop.

You will recover those points, but if you can, pay this off all at once that way you only have one or two updates left, depending on a lender. As long as CO remains unpaid, but there is activity on it (even if it's positive thing such as payments), you can expect your scores to fluctuate

Good news is, once you're done with your last unpaid negative and everything is updated to reflect $0.00 balances, your scores can start gradual recovery. It's a slow(ish) process, you wont get all your points back till last negative drops off, but it will get better 

t 

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I am paying for Experian monitoring.  I guess I was confused why in the eight days since that showed up on my credit report ( the $200 decrease upated on my charged-off account) that it never reduced my score until the first of this month rolled around.  That's why I had difficulty in equating it to my charged-off account updating.   But it's really the only thing I can put it to.  Although, all this time, my score never decreased from the updating the $200 (or more) payment every month  before, to my recollection.  But  it did always alert me to the "negative activity" because of it.  But I can't way to pay it off so the updating will finally stop.

[Anonymous]

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@Jannelo wrote:

I woke up to find my FICO score decreased by 4 points, from 638 to 634.  Zero has changed...

Can your credit score dip like this for no reason?

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Something changed.  Something always changes if there's a scoring change.  A credit score is generated when data is put through an algorithm.  If the score changes, it means the input data (your CR information) has changed.  It's really as simple as that.

It's all about determining what changed, which many times can be a challenge.

[Jannelo]

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@Anonymous wrote:

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@Jannelo wrote:

I woke up to find my FICO score decreased by 4 points, from 638 to 634.  Zero has changed...

Can your credit score dip like this for no reason?

---

Something changed.  Something always changes if there's a scoring change.  A credit score is generated when data is put through an algorithm.  If the score changes, it means the input data (your CR information) has changed.  It's really as simple as that.

It's all about determining what changed, which many times can be a challenge.

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I hear you, but I swear nothing changed, especially not anything from 8/31 to 9/2.  I don't know what I'm missing.  I guess I will never know. Anyway, I had pulled my 3-bureau report on August 31st.  I did that because I was upset my Experian had not increased all month.  In hindsight, I should have been happy with it sitting at 638, not moving up or down, since only two days later it dropped 4 points.  But I was happy when I pulled the 3-bureau report on 8/31, because while for  the month of August I saw no change in my Experian score, I did have a 4-point increase on both Equifax and TransUnion.   As those scores are lower, I was excited to see some upward movement.

So, anyway, I've been stewing over this 4-point decrease today since Experian randomly emailed me a boilerplate email listing all the reasons why a FICO score might drop, and none of them were true in my case.  So I did another 3-bureau pull today, 9/4, to see if there was something I'm missing and wanted to see if all three of my FICO scores across the board decreased, or only Experian.  I'm glad I did.

While Experian dropped 4 points, between 8/31 and 9/4, Equifax and TU gave me nice increases.  So I'm all smiles again.  I needed that morale boost.

8/31 -  Experian - 638.   Equifax - 621.   TransUnion - 622.

9/4  -   Experian - 634.   Equifax - 635.    TransUnion - 627.

So a 14-point increase with Equifax and a 5-point increase with TransUnion.  Yay!!!!!

I know people will say stop obsessing.  As a rebuilder slowly crawling towards a "good" score, a 4-point decrease was upsetting, especially as only positive things happened that month, and I could not figure it out no matter how much I poured over my reports comparing.  I'm trying to get better scores because my car insurance is so high.  I want to switch as soon as possible.  So I'm waiting for my scores to get higher, as I know that's one component.

[Anonymous]

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@Jannelo wrote:

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I hear you, but I swear nothing changed, especially not anything from 8/31 to 9/2.  I don't know what I'm missing. 

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I don't know either, but know that you are missing something.  Again, scores are only produced based on input data.  Different score, different data.  My guess in crossing into a new month may be the falling off of an old account that could have lowered AAoA across a threshold.  Those are usually good for 3-5 points on average from what I've seen.

[Anonymous]

While I have been there once as well, rebuilding phase. And stayed in the 650's for what seemed an eternity, I never let small score decreases like that get to me. 4-8 points may seem demoralizing with lower end scores as it sets you back each time it happens, these setbacks are generally temporary. So I wouldn't stress over it too much, especially since there's nothing you can do about it after the fact.

It's the 20+ drops that worry me, as it means something significant has happened. As others have pointed out, by taking care of those negatives and mainting your current AZEO strategy. You should rebound just fine. 

Each individual CRA has different scoring models, so while one may be lower and the other higher. It only matters when it comes time for whover is pulling that certain bureau. A higher EQ versus a lower EX doesn't necessarily mean all is good. 

[NRB525]

As long as you continue to pay all accounts on time, and do not add any more lates or charge offs, your score will slowly rise over time.

Credit building is a marathon, not a sprint.