Please Can Someone Please Help Me Understand Loss of 24 points?

[CharBAM]

On October 1, 2024 - I lost -24points on Equifax and I am baffled as to why??

Thank you in advance for reading all of this – I really could use a seasoned perspective to weigh in, possibly even to school me towards correct thinking, but until someone does…I’m going to drive my self crazy:

Equifax recorded  three changes on my CR along with the point reduction:

1. Balance Decreased – Open Sky secured CC with a $300 CL

“Between August 23 and September 24 your balance decreased by $72 from $251 to $179. If possible, keep working toward getting your credit utilization rate below 30%.”  

Questions:  Could a credit utilization rate of 59% on a secured CC with a $300 CL lower my score by 24 points? I paid $125 to the CC on time in September. (please see my contextual note below).

1. Bridgecrest Car Payment account balance decreased by $203 from $17,320 5to $17,117

(don’t even get me started on this predatory car loan that I have already paid $16,000  on only to see  a mere 8% of the loan paid off over 2.8 years). My car payment of $500 was paid on time in September.  And yes, it was my fault for buying a $19,000 car at a ridiculous interest rate because I had a limited credit history, and desparately needed a car.   If had half a brain enough to understand that out of a $ 500 p/month car payment only $200 would go to the principle....I might have decided that walking 10 miles per day was preferable.

1. “Account REMOVED  - Your credit card account with AMEX was removed from your CR between August 31- October 1, 2024.”

 NOTE:  This card was closed in good standing in 2003.  I have not used it or thought about it for 21 years.

 Could this have caused the loss of points? If it did, can someone help me understand the logic behind a loss of 24 points….which can really affect one’s credit significantly. How this is considered a fair reflection of my risk as a borrower? Why would they remove it now? Why should I be penalized without notice 21 years later?

Besides my car payment, and OpenSky I have one 4-year-old collection from Cox for $579, and which, from what I can tell, isn’t going to make a difference in any positive way if I pay it off. And that is everything on my CR.

Contextual Note re: OpenSky 

• I only opened the CC in July 2024 because I was advised that a secured card with on-time monthly-payments was a way to build credit.
•  I was not informed that any utilization over 30% would lower one’s score so significantly. I found out the hard way on August 31st  when I lost -29 points because I was carrying a balance of $251 out of $300.
• Earlier in August I had already made a $100 on-time, first payment (because I opened the account in July),  but unawares, I used the card after that.
• When I called OpenSky I was informed that any balance on the card as of the 24th of the month is reported to the CB. So silly me, paying on-time and far more than my minimum payment - isn’t going to do anything more helpful than the harm a 83% credit utilization (on a  mere $300 CL) is going to inflict. 

I guess I’m in disbelief – with as much CC debt as one hears about …how are people actually keeping their utilization at 30% every month? Will every month that a person fails to bring every card down to 30% result in a loss of points?

I didn’t even want this card. I abhor CCs – but because all I had was a #$%$^ #  soul-crushing car loan on my CR was rendering me a credit risk -I was strongly advised to open a secured CC.  What happened to the notion that having NO credit card debt makes you less of a risk because you only buy what you can pay for (outside of large purchases)??

Can someone please weigh in to help me make sense of the loss of 24 points due to either, or both:

1. The removal of a 20-year-old closed account that I didn’t know was there and doesn’t report monthly

      2. Owing $179 on a secured card that I basically prepaid, and after having just lost 29 points the month prior….and where algorithms will continue to insist  that carrying-over any balance in excess of $100 will make me a credit risk.

I am finally trying to do all the right things, and it is incredibly disheartening to get absolutely nowhere.   Thank you for any advice/rational perspective!

[GZG]

when the old account was removed, the average age of your accounts became younger, so you lost points on your credit score

length of credit history is worth 15% of your FICO score

[CharBAM]

Thanks for your reply.  I suspected as much - but it seems like a senseless way to lose 24 points, unexpectedly, through no "uncreditworthy" action on my part, 21 years after the fact?  Why would AMEX do this now?  What harm does it do them to just keep it there?  Why is the system set up to make it so easy to just slam consumer credit scores for something so....like I said....senseless?

[GZG]

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@CharBAM wrote:

Thanks for your reply.  I suspected as much - but it seems like a senseless way to lose 24 points, unexpectedly, through no "uncreditworthy" action on my part, 21 years after the fact?  Why would AMEX do this now?  What harm does it do them to just keep it there?  Why is the system set up to make it so easy to just slam consumer credit scores for something so....like I said....senseless?

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if it was closed in 2003, it was really only supposed to stay on your report for ~10 years after that, so it wasn't really meant to be on there in the first place

and lowering your score is nothing personal, it's just math

older credit profiles pay back their debts more often than younger credit profiles, and that means older profiles get extra credit score points

if you want to learn how to absoutely maximise your FICO score for a particular purpose like applying for another car loan or mortgage or credit card or something, we can tell you

but as long as you're paying your bills in full and on-time every month, you're good, don't worry too much because the score will go up and down as your balances change

[Thomas_Thumb]

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@CharBAM wrote:

On October 1, 2024 - I lost -24points on Equifax and I am baffled as to why??

Thank you in advance for reading all of this – I really could use a seasoned perspective to weigh in, possibly even to school me towards correct thinking, but until someone does…I’m going to drive my self crazy:

Equifax recorded  three changes on my CR along with the point reduction:

1. Balance Decreased – Open Sky secured CC with a $300 CL

“Between August 23 and September 24 your balance decreased by $72 from $251 to $179. If possible, keep working toward getting your credit utilization rate below 30%.”  

Questions:  Could a credit utilization rate of 59% on a secured CC with a $300 CL lower my score by 24 points? I paid $125 to the CC on time in September. (please see my contextual note below).

1. Bridgecrest Car Payment account balance decreased by $203 from $17,320 5to $17,117

(don’t even get me started on this predatory car loan that I have already paid $16,000  on only to see  a mere 8% of the loan paid off over 2.8 years). My car payment of $500 was paid on time in September.  And yes, it was my fault for buying a $19,000 car at a ridiculous interest rate because I had a limited credit history, and desparately needed a car.   If had half a brain enough to understand that out of a $ 500 p/month car payment only $200 would go to the principle....I might have decided that walking 10 miles per day was preferable.

1. “Account REMOVED  - Your credit card account with AMEX was removed from your CR between August 31- October 1, 2024.”

 NOTE:  This card was closed in good standing in 2003.  I have not used it or thought about it for 21 years.

 Could this have caused the loss of points? If it did, can someone help me understand the logic behind a loss of 24 points….which can really affect one’s credit significantly. How this is considered a fair reflection of my risk as a borrower? Why would they remove it now? Why should I be penalized without notice 21 years later?

Besides my car payment, and OpenSky I have one 4-year-old collection from Cox for $579, and which, from what I can tell, isn’t going to make a difference in any positive way if I pay it off. And that is everything on my CR.

Contextual Note re: OpenSky 

• I only opened the CC in July 2024 because I was advised that a secured card with on-time monthly-payments was a way to build credit.
•  I was not informed that any utilization over 30% would lower one’s score so significantly. I found out the hard way on August 31st  when I lost -29 points because I was carrying a balance of $251 out of $300.
• Earlier in August I had already made a $100 on-time, first payment (because I opened the account in July),  but unawares, I used the card after that.
• When I called OpenSky I was informed that any balance on the card as of the 24th of the month is reported to the CB. So silly me, paying on-time and far more than my minimum payment - isn’t going to do anything more helpful than the harm a 83% credit utilization (on a  mere $300 CL) is going to inflict. 

I guess I’m in disbelief – with as much CC debt as one hears about …how are people actually keeping their utilization at 30% every month? Will every month that a person fails to bring every card down to 30% result in a loss of points?

I didn’t even want this card. I abhor CCs – but because all I had was a #$%$^ #  soul-crushing car loan on my CR was rendering me a credit risk -I was strongly advised to open a secured CC.  What happened to the notion that having NO credit card debt makes you less of a risk because you only buy what you can pay for (outside of large purchases)??

Can someone please weigh in to help me make sense of the loss of 24 points due to either, or both:

1. The removal of a 20-year-old closed account that I didn’t know was there and doesn’t report monthly

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Fico looks at length of credit history as scoring factors - AAoA and AoOA. Both open and closed accounts still on file are included. I assume the AMEX was by far your oldest account on file. So its removal would have a signigicant impact on score.

Yes, having open and actively used revolving credit is hugely important to building credit history and improving score. I'll say it again, if you want high credit scores, revolving credit accounts are vitally important. It does not matter whether such accounts are secured or unsecured.

Revolving credit UTILIZATION is a major scoring factor. Fico looks at both aggregate utilization AND highest utilization level on all your individual cards. Highest utilization is balance as a % of credit limit NOT a $ amount. So $200 balance on a $300 CL is scored the same as $20k on a $30k CL card.

Some important utilization thresholds for cards are: 29%, 49% and even more so 89% (red flag for max out). You can charge as much as your card will accept during any given month - but make progress payments to ensure REPORTED balance is less than 29%*

* An important utilization threshord for aggregrate utilization is 9%. You want to stay below that to avoid significant score penalties. If you have only 1 card; card UT = ag UT. In this case the card's reported balance should be under 9%.

Few people like micromanaging revolving credit payments to keep utilization levels low. So, strategies are adopted to:

1. Get revolving credit and develop an ontime payment history.

2. Keep reported card utilization levels under 49% and more preferrably under 29%.

3. Increase card CLs through soft pull CLI requests or graduate secured card(s) to unsecured status and then pursue CLIs.

A recently opened revolving account puts the provile in the new credit penalty box. That stays in effect until the most recent revolving account ages to 12 months. Having revolving accounts is a crucial component to credit mix. Get some revolvers near term so your score can benefit from their existance later.

Ask whoever issued you the secured card if it can be converted to unsecured. If yes, what are the requirements for conversion? If no, keep the card now but look for a 2nd card from a different issuer - either another secured card that can convert or an unsecured card. Either way, try to hold aggregate utilization under 9%.

[FicoMike0]

You've gotten great advice here. I'll just add a few points.

1. You ask why? a lot. Doing that just makes you crazy. Fico makes the rules, but some here have figured them out. There is no why.
2. Utilization has no memory (at least until fico10t). Any points you lost this month due to high utilization, you can gain back next month, with low utilization.
3. How do folks manage their utilization? Painfully, until they achieve a high credit limit. I had a hard time, less than two years ago, when my cl was $500. Now, with a cl >$50,000, I don't worry about utilization.
   Remember, it's the balance that posts, even if you pif before the due date (which you should always do!).
4. Just because you have a Credit card, doesn't mean you have to use it. One charge a month is enough to show activity. I have a card that I only use to pay a $30 monthly phone bill. They just raised my credit limit from $4000 to $6000. Quick quiz, what's my utilization? 0.5%.

[SouthJamaica]

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@CharBAM wrote:

On October 1, 2024 - I lost -24points on Equifax and I am baffled as to why??

Thank you in advance for reading all of this – I really could use a seasoned perspective to weigh in, possibly even to school me towards correct thinking, but until someone does…I’m going to drive my self crazy:

Equifax recorded  three changes on my CR along with the point reduction:

1. Balance Decreased – Open Sky secured CC with a $300 CL

“Between August 23 and September 24 your balance decreased by $72 from $251 to $179. If possible, keep working toward getting your credit utilization rate below 30%.”  

Questions:  Could a credit utilization rate of 59% on a secured CC with a $300 CL lower my score by 24 points? I paid $125 to the CC on time in September. (please see my contextual note below).

1. Bridgecrest Car Payment account balance decreased by $203 from $17,320 5to $17,117

(don’t even get me started on this predatory car loan that I have already paid $16,000  on only to see  a mere 8% of the loan paid off over 2.8 years). My car payment of $500 was paid on time in September.  And yes, it was my fault for buying a $19,000 car at a ridiculous interest rate because I had a limited credit history, and desparately needed a car.   If had half a brain enough to understand that out of a $ 500 p/month car payment only $200 would go to the principle....I might have decided that walking 10 miles per day was preferable.

1. “Account REMOVED  - Your credit card account with AMEX was removed from your CR between August 31- October 1, 2024.”

 NOTE:  This card was closed in good standing in 2003.  I have not used it or thought about it for 21 years.

 Could this have caused the loss of points? If it did, can someone help me understand the logic behind a loss of 24 points….which can really affect one’s credit significantly. How this is considered a fair reflection of my risk as a borrower? Why would they remove it now? Why should I be penalized without notice 21 years later?

Yes when an old closed account drops off your report, it decreases your average age of accounts. And if it was  your oldest account, it decreases your age of oldest account as well. Both of these events cost points.

Besides my car payment, and OpenSky I have one 4-year-old collection from Cox for $579, and which, from what I can tell, isn’t going to make a difference in any positive way if I pay it off. And that is everything on my CR.

Contextual Note re: OpenSky 

• I only opened the CC in July 2024 because I was advised that a secured card with on-time monthly-payments was a way to build credit.
•  I was not informed that any utilization over 30% would lower one’s score so significantly. I found out the hard way on August 31st  when I lost -29 points because I was carrying a balance of $251 out of $300.
• Earlier in August I had already made a $100 on-time, first payment (because I opened the account in July),  but unawares, I used the card after that.
• When I called OpenSky I was informed that any balance on the card as of the 24th of the month is reported to the CB. So silly me, paying on-time and far more than my minimum payment - isn’t going to do anything more helpful than the harm a 83% credit utilization (on a  mere $300 CL) is going to inflict. 

I guess I’m in disbelief – with as much CC debt as one hears about …how are people actually keeping their utilization at 30% every month?

You should try to keep your aggregate revolving utilization at 9% or less, and should try not to let any individual account exceed 28%.

Will every month that a person fails to bring every card down to 30% result in a loss of points?

Yes. But not down to 30%, down to 28% or less.

I didn’t even want this card. I abhor CCs – but because all I had was a #$%$^ #  soul-crushing car loan on my CR was rendering me a credit risk -I was strongly advised to open a secured CC.  What happened to the notion that having NO credit card debt makes you less of a risk because you only buy what you can pay for (outside of large purchases)??

That's not FICO. FICO penalizes you if all your accounts have zero balance. Optimum is to have most cards report zero balance, with one reporting a small balance.

Can someone please weigh in to help me make sense of the loss of 24 points due to either, or both:

1. The removal of a 20-year-old closed account that I didn’t know was there and doesn’t report monthly

      2. Owing $179 on a secured card that I basically prepaid, and after having just lost 29 points the month prior….and where algorithms will continue to insist  that carrying-over any balance in excess of $100 will make me a credit risk.

The fact that it's 'prepaid', as you put it, is meaningless. The secured cards are reported and scored just like any other credit cards.

I am finally trying to do all the right things, and it is incredibly disheartening to get absolutely nowhere.

Yes but if you want to maximize your scores you need to know what the 'right things' are. They're not necessarily what you're guessing they are.

  Thank you for any advice/rational perspective!

This isn't all necessarily "rational". It just is what it is.

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