Neighbor's Fico/Credit Score Dropped 17 points by going from 2 percent to 9 percent usage. Why?

[oldrocker67]

Hi Everyone:

One of the neighbors mentioned to me that they had a FICO Score 794 and 795 from the other bureaus.  

They would use on almost every month 2 percent of available credit, no late payments.

He possess either 2 or 3 credit cards (Opened 7 and 10 years ago). In the month of December he took a cash advance on one of the cards. The usage totalled 9 percent for the month because of this.

All the cards were paid in full on-time.  All the bureaus showed a drop of 17 points.

While obviously, it is great to stick to 2 percent (I use 1-2 per month), is 9 percent one time and paying before the due date considered that awful where you would lose 17 points?

If he goes back to the 2 percent usage, how long before he sees the score back to the prior 794/795 marks?

Thanks to everyone as always!

[sznthescore]

Said neighbor crossed over the recommended threshold of 8.9% and below for utilization. However, that much of a score drop.... not so sure about that part. Others will chime in...

[Remedios]

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@oldrocker67 wrote:

Hi Everyone:

One of the neighbors mentioned to me that they had a FICO Score 794 and 795 from the other bureaus.  

They would use on almost every month 2 percent of available credit, no late payments.

He possess either 2 or 3 credit cards (Opened 7 and 10 years ago). In the month of December he took a cash advance on one of the cards. The usage totalled 9 percent for the month because of this.

All the cards were paid in full on-time.  All the bureaus showed a drop of 17 points.

While obviously, it is great to stick to 2 percent (I use 1-2 per month), is 9 percent one time and paying before the due date considered that awful where you would lose 17 points?

If he goes back to the 2 percent usage, how long before he sees the score back to the prior 794/795 marks?

Thanks to everyone as always!

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Well, that's really hard to answer without additional details but if the scoring drop was solely due to utilization, they will get all their points back once utilization goes down.

There might be other metrics that contributed to scoring drop such as number of accounts with balances, number of revolving accounts with balances etc.

Again, nothing to sweat, once things go back to way they were, points will be back. 

[pizzadude]

I agree with the above posts, the points will likely come back when revolving utliization % and number of cards with balances improves. 

Also, losing 17pts is something like a 2% score hit, it might seem like a lot but I'd argue it's de minimus on a score that's pushing 800.

[markbeiser]

If it was all on one card, and it took the utilization on that card above 30%, it can cause a bit of a drop.

[oldrocker67]

Hi Markbeiser:

Thanks for pointing out about the ulilization on one card. I asked him and the card with the cash advance the percentage was 15 point something and he paid the bill a few days after.

I should have given that piece of the puzzle, it was superlative you thought of it for me!

Enjoy the weekend,

[markbeiser]

Note that paying the statement balance in full won't be reflected in the credit reports until a few days after the next statement date.