My Score Decreased Due to Moving Credit Lines

[Anonymous]

Hello - I am freaking out a little.  The mortgage officer is going to re-run my credit report in the next two weeks to close on our new house at the end of January.  I have been working on my credit utilization since July.  My FICO middle mortage score has only gone from 711 (in July) to 721 recently. 

Last week, I called Chase regarding an offer for a credit limit increase on one of my two credit cards with them.  One of the credit card has been at $0 balance for years, and the other one was at 47.5%.  I missed the deadline for the offer; however, the representative offered to move the majority of the unused card's credit line to the card that needed the credit limit increase.  It sounded like a great idea because, with a modest extra payment this week, I would bring the card's utilization to under 30%.  Not so fast...

The $0 balance credit card just reported the credit line decrease (from $13,800 to $800), and TransUnion just took off 9 points from my FICO Score 8!!  I didn't think that moving the credit line would be detrimental because I thought it was the same net total credit line, but I didn't foresee the timing.  The decreased card reports 2 weeks before the increased card. 

Now I am wondering, will I lose more points when the other card reports a credit line increase?  Should I dispute and call Chase to undo the credit line move?  Would that undo the point loss? or cause even more damage?

I was already planning a dispute regarding some late derrog's from 16 months ago on a Toyota Visa Card for which my goodwill letters have not helped. The loan officer told me that a conventional loan does not deny a mortage for pending disputes, but I dont know if having 2 disputes with each credit bureau would be even more detrimental.  What do you think?

Thank you!

[Anonymous]

First I would take a deep breath and not panic. I certainly wouldn't go and start disputing anything.
What you need is to look at your mortgage scores, not your fico 8. You can get them here with the $29.99 3b plan. (Just cancel after you get your scores so you don't get monthly charges)
Your loan company will be using your mortgage scores. They toss out the highest and the lowest score and go with the middle one. Check those scores before taking any action.
Mortgage scores may have gone up or remained the same or only dropped a small amount .

[Anonymous]

Credit limits in and of themselves don't impact FICO scores.  If you took a CLD on a card, it would not adversely impact your score unless you had a balance on the card and the CLD caused your utilization on that card to cross a threshold.  You however did not have a balance on the card, so the limit on the card becomes irrelevant.  You also eliminated the potential variable of aggregate utilization here, as you moved your limit from one card to another, thus keeping your aggregate limits the same.  Is it possible that the CLD reported first and the corresponding CLI didn't report yet, thus meaning that your aggregate limits are temporarily lower, possibly making your aggregate utilization higher? 

[Anonymous]

Thanks ScoreJunkie!

I bought the myFICO membership early December.  That is how I know that my mortage score (middle) went from 711 in July to 721 as of Dec 5th.   I was planning to keep my myFICO membership for another month so I can know the updated mortgage scores, but the monthly update will be Jan 5th, at which point it may be too late to do anything.  I don't know if there is another way to know my mortage FICO sooner.

I guess I am thinking that, if my FICO 8 went down by 9 points, the mortage scores will go down too. Not only that... now I am worried the scores will go further down once the other credit card account reports a credit line "increase"...even though all this is a zero net change to the aggregage total. 

[Anonymous]

I'm not sure where you can get mortgage scores besides here. But I do understand your concern that your mortgage scores will mirror fico 8. Have you spoken to your loan officer? There is a chance this won't make a difference.
Maybe BBS or another forum vet can chime in and help better. ☺

[Anonymous]

Thanks BrutalBodyShots!

Oh, YES!!!  That's right! Thank you!

That is what's happening here.  The CLD reported last week and the corresponding CLI won't be reported until end next week. Thus, my aggregate utilization is temporarily higher.

I hope that when my aggregate utilization goes back down, that the CB give me back the same generous amount of points they temporarily took off. 

This score watching is like a thriller ride!

[tparks5961]

Another thing I think I remember, is that if you call chase or discover, they will update to your credit bureau upon request.

So you may be able to call them to have them update your lower utilization. Let me know if you succedd.

[Anonymous]

BrutalBodyShots and everyone else -

What are your thoughts on the filing of a dispute on the late marks?  I already sent 2 rounds of Goodwill Letters and made no headway.  I got several denials, and several "this is a duplicate. we will ignore. case is closed". Since the new house is scheduled to close end of January,  I am out of time to send more Goodwill letters.    

Someone suggested sending Verification letters, but I could never determine what that means.  

I was thinking about filing a Dispute and timing it juuuust right such that, when the mortgage officer pulls my report, those derog marks do not count against me. The loan officer said convential loans do not deny loans because of disputes. And since the account is closed, it won't make a difference on my aggregate utilization nor the average age of accounts.

The question is... how long will the dispute take to post and temporarily "delete" the derogs?  Should I send it in writing?  Or over the phone with each of the bureaus?  Or through the links on the myFICO website?  OR

Should I use a service like Lexington Law instead of a dispute?  I don't know how legit they are.

If you need more details, the late derog marks (30, 60, and 90-day) are on a $750 credit limit CC with $0 balance since Aug 2017.  The bank told me the account is open but the credit reports have it as Paid & Closed as of March 2018.  It is a Toyota Visa Rewards through Comenity Bank.  Toyota threw the ball to Comenity saying they do not handle my request, and Comenity couldn't care less about my history as a Toyota owner nor my potential for new credit cards as I furnish the new house, etc.  

[Anonymous]

Oh!!! I did not know that!!  Thank you, tparks5961! 

There are 3 credits cards to which I made massive payments or paid off and they have not reported yet.  I'm going to make those calls!

[Revelate]

Whoa!

Absolutely NO DISPUTES during your mortgage process.

I don't know why your LO said what he said but it is patently false: that can and will disqualify you for financing, period.  Credit scores are not accurate by definition when any account is under dispute which means they cannot bundle off the loan and sell it... so absolutely do not do that until your mortgage closes and you have keys in hand.  No UW (or at least any that wants to keep their job) will sign off on a file with active disputes on the credit report.

I would've suggested the strategy anyway when you're talking re-allocating lines: if you have the credit score you need to qualify, sit on your hands other than making sure you don't cross any further revolving utilization boundaries.