Score drop after balances decrease

[GApeachy]

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@Anonymous wrote:
I just received this same Alert from MyFICO. I got a balance DECREASE alert and I also got an alert that my Equifax score had dropped 30 points. My credit card account reported that the balance went from $326 to $303 and it said that my score dropped 30 points because of this $23 balance decrease.

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Directly under your scores MyFico states, "Your score may be affected by additional information in your credit report" .  If you wait a few days and pull your report(s) from say CK, Exp, TrustedId, etc. more than likely you'll be able to find the condition(s)/item(s) that actually caused that particular change.  Not always but more than likely you can pin it down....you just gotta dig.  

[Anonymous]

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@Anonymous wrote:
My credit card account reported that the balance went from $326 to $303 and it said that my score dropped 30 points because of this $23 balance decrease.

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It did not say that.  You're making the assumption that the alert reason (reported balance drop) and the score provided at the same time are related, when in fact these two things have nothing to do with each other.

I really wish MF would start putting a disclaimer on this.  It's fine that it states that your score may be impacted by other events, but I'd guess that easily dozens of MF members every day are wrongly mislead by the current alert/score system.  It should very simply state under the alert reason and score change, "The alert reason provided above may not have anything to do with your updated score provided" or something similar.

[Anonymous]

The same thing just happened to me, that's how I found this posting on the forum. After reading a bunch of things on the internet, I found one explanation that actually satisfies me:
From https://www.doughroller.net/credit/7-things-cause-credit-score-fluctuate-month-month/ :
"Scorecard Hopping
Another explanation to changes in a credit score is that you may have been placed in a new scorecard. Called, scorecard hopping, this occurs when FICO places a consumer in a new scorecard. FICO doesn’t simply lump every consumer into the same pot and evaluate us all equally. They put us in what they call different scorecards.

FICO provides very little information about its scorecards. One scorecard that most believe exists, however, is for those who have a bankruptcy on their record. Scorecards enable FICO to evaluate the risk of similarly situated consumers. Your credit score depends in part on which scorecard you are in (and there’s no way to know which one

Now, scorecard hopping occurs when FICO moves a consumer from one scorecard to another. For example, if a bankruptcy is removed from a consumer’s credit file, they will be moved out of the bankruptcy scorecard into another scorecard. What’s interesting here is that even though you might get moved into a better scorecard, your credit score can actually move lower as a result of that change.

Why? Because you are now being compared to a different group of consumers. You may have done well when compared to others who have filed for bankruptcy. After the scorecard hop, however, you are now being compared to a very different group of consumers. Long term the switch should help, but in the short term it can lower your score."

[CuriousGeorge_77]

I have not found this to be true. I recently showed a balance DECREASE of $250 (across all cards), which reduced my score by 1 point. The following month, my balance INCREASED by $307 and lowered my score by 13 points. Incidently, this are mid-cycle balances. All of my cards are paid off in full every month. You would think the geeks at FICO could figure out a more sophiticated system. So disappointed such a sloppy and inaccurate system is used in so many aspects of modern life.

[Anonymous]

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@CuriousGeorge_77 wrote:

I have not found this to be true. I recently showed a balance DECREASE of $250 (across all cards), which reduced my score by 1 point.

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Incorrect.  Perhaps you have not read the replies in this thread to others like yourself that have stated that a balance decrease dropped their scores.  In none of these examples did the balance decrease drop Fico scores.  All of you are being mislead by the score change provided at the time of your alert by assuming that the score change is related to the alert reason.  It isn't and it's very important to understand that.

[Anonymous]

I'm not sure about MyFico, but there's an issue with Experian with a delay in alerts. I check my report every day. I will see a decrease in balance, but it will not trigger an alert until a day or 2 later, and I won't receive an email until a day or 2 after that. If I were only relying on emails, I would get an email alert, log in and see TODAY'S score, but an alert that was actually triggered 3 or 4 days ago. Depending on what you have going on with your reports, 3 or 4 days could change your score a good bit. Not to mention, a lot of things that affect score do not trigger an alert at all. Just something else to take into consideration.

[Anonymous]

THANKS for the info on here........!

[ridgebackpilot]

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@Anonymous wrote:

This score drop is a joke.  I used your simulator, looked at what should happen if I paid off my credit cards and my score went UP.  So, I paid them off and my score DROPPED.  I'm getting ready to lease a new car and now I went from 770 to below 750.  This entire system is nothing but a pain in the ass scam built to torture people and benefit the predatory credit companies.  If your website is providing information it should be ACCURATE information.  And this bull**bleep** system, which is obviously rigged, needs serious change.

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The fact that you don't yet fully understand how the FICO system works doesn't mean the system is rigged!

I'll admit that the way scores are reported is often confusing. It's sometimes difficult to attribute a score change to a particular cause. But with experience, you'll learn to interpret changes more accurately.

For example, it's well-known that paying all credit card balances completely off will result in a score decrease. That's why abundant posts here recommend paying off all cards EXCEPT one. Keeping overall credit card utilization below 9.8% (but not zero) helps maximize your scores.

Finally, you're probably worrying unecessarily about your scores with respect to leasing a new car. Recent experience has shown that even your reduced scores are likely good enough to qualify you for Tier 1 financing, including Zero Percent APR offers. Car manufacturers are hurting and they're motivated to sell and lease cars. I doubt you'll have a problem. Good luck!

[smittyb]

I watched my VANTAGE 3  score drop 13 points when. When I went from 50% UTI to < 30%. UTI.

The simulators told me it would and I thought they were crazy, but it did.

I just posted on here earlier today:

My TU Vantage 3.0 score was 695 yesterday and I paid down a card from 50% UTI to 28% UTI and they changed my score to 683 citing that my number of accounts above 50% UTI decreased by 1.

(WalletHub)

Conversely, MY Experian FICO 8 score went up 14 and all my Experian scores increased form 5-16 points.