Score Drop :(

[Anonymous]

I just received an alert yesterday regarding my credit score... "Your FICO® score decreased to 696 on February 5, 2010."

This score decrease may be caused by this new reason:

• You've recently been looking for credit.

I applied for a mortgage pre-approval which pulled my report twice (I'm assuming it was accounted as a single pull). 

The reason I received the alert on the other hand:

"1 of your previously dormant accounts reported recent activity"

I used a credit card I haven't used in 4 months on a small purchase.  Would the mix of these 2 dings result in a drop of 16 points? 

[marty56]

I have seen an INQ drop my FICO score 15 points.  yes letting an account report a balance, even if you PIF, that hasnt reported for awhile could also lower your score.  You will get the points back if you PIF the card and don't let a balance report next month though.

[Junejer]

The INQ likely just triggered the alert. The lost points probably came from the dormant acct reporting a balance.

[AndySoCal]

The dormant account warning is from score watch be default it is always set at three months. You can change that if you want. What was balance compared to the credit limit as a percentage?  Also where the inquiries pulled the same day?

Message Edited by AndySoCal on 02-07-2010 07:08 PM

[Anonymous]

I charged $9 to the credit card then PIF within the same week. 

[AndySoCal]

Were the mortgage inquires pulled on the same day or different days? The credit use did not cause the score change since you used the card within the last 6 months.

[Anonymous]

Same day pull.

So if a credit card isn't used for 6 months and THEN used, it will decrease your credit score?

[haulingthescoreup]

A one-time hit, and then it goes away again.

For those planning an app (as opposed to going off half-cocked ), it would be wise to get anything like this out of the way at least a month before app time.

[Anonymous]

Actually, this just in!  I had an inq fall off at the 1-year mark yesterday which brought my score back up to 712.  When it was reporting a total of 5 INQs instead of 4, it dropped my score by 16.  Now I'm back at 4 (5 total including the 2 hits for a pre-approval which should count as one I'm led to believe).  At least I have something to look forward to on March 18th now and then early April. 

[AndySoCal]

You are correct those 2 mortgage inquiries will count as one inquiry. There is a possibility that because the inquiries were on the same day they might not have deduped. The system counted them as 2 inquiries rather than one. (My speculation) Seeing that the score has recovered looks everything is as it should be.

To clarify the confusion that I caused.  The dormant account message is related to a score watch setting. The dormant account setting in Score watch  is set at 3 months. So when the card was used after four months of non use that triggered score watch to send the alert  You can adjust the that setting if you want. The dormant account alert is not coming from or related to the FICO score change.  My advice would be use the credit card at least 3 times a year.

Message Edited by AndySoCal on 02-09-2010 06:41 PM