Understanding FICO Scores

[Anonymous]

Why is it that once you use the CC it's reported instantly and the score drops, but when the balance is paid in full we have to wait 30 days. It's frustrating.. I just dropped -9 for $50.

[Anonymous]

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@Anonymous wrote:

Why is it that once you use the CC it's reported instantly and the score drops, but when the balance is paid in full we have to wait 30 days. It's frustrating.. I just dropped -9 for $50.

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@Anonymous 

That's not how it works.  The vast majority of credit card lenders report to the credit bureaus ONCE per month, and that's usually at midnight of your Statement Close date.  Transactions made by credit card are only reported to the lender, not to the credit bureaus so they can't affect your credit score.  Lenders report the aggregate BALANCE on your account to the credit bureaus, not individual transactions.

The only way a $50 charge could affect your score is if it was made close to the Statement Close date, so it was reported to the credit bureaus and it changed your credit utilization percentage.

[PicoFico]

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@Anonymous wrote:

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@Anonymous wrote:

Why is it that once you use the CC it's reported instantly and the score drops, but when the balance is paid in full we have to wait 30 days. It's frustrating.. I just dropped -9 for $50.

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@Anonymous 

That's not how it works.  The vast majority of credit card lenders report to the credit bureaus ONCE per month, and that's usually at midnight of your Statement Close date.  Transactions made by credit card are only reported to the lender, not to the credit bureaus so they can't affect your credit score.  Lenders report the aggregate BALANCE on your account to the credit bureaus, not individual transactions.

The only way a $50 charge could affect your score is if it was made close to the Statement Close date, so it was reported to the credit bureaus and it changed your credit utilization percentage.

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Also, it's possible a new account finally made it onto your file and it happen to coincidentally align with a purchase making you think it was that.

[SouthJamaica]

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@Anonymous wrote:

Why is it that once you use the CC it's reported instantly and the score drops, but when the balance is paid in full we have to wait 30 days. It's frustrating.. I just dropped -9 for $50.

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As @Anonymous pointed out, that's not how it works. If you were to give us specifics, we might be able to explain what happened.

[Anonymous]

They are all correct. Don't feel bad though, the vast majority of people misunderstand and don't know how it works and without learning about it it can seem very odd because it is complex. But if you spend a little time learning it'll make a lot more sense. we welcome you to the forum and encourage you to read and learn. 

[Anonymous]

I finally found where that charge came from. I forgot that my husband used the CC in March before I paid off the balance. Because my utilization was slightly high it pushed it higher. I was above 36% to now 47% utilization. From reading so many things, now I'm aiming to keep it below 10%..

[Anonymous]

Can you please explain why I didn't get a score increase with EX after a decrease on my Bankcard. I did get +9 with TU.  

[Anonymous]

You would have to give specifics for that to be possible, if it is possible. We'd need to know before and after aggregate and individual utilization, number of accounts/revolvers with a balance before and after, and any other changes to your profile, along with an idea of your profile stats, see my siggy below.

[Anonymous]

I'm new here so I don't know how to do my profile. Here is everything I have..

5 Revolving Accts. (1 bankcard, 1 Cap. 1, 3 stores cards) stores cards zero balance. Bankcard CL $1000 owe $200. Cap.1 CL $500 owe $107. 

1 Mortg. Balance. 27k

1 Auto Bal. $3k

2 Loans. both bal. below 3k

All autopay paid on time no lates

2 CO 2015 both $500+ each

5 Medical Collections all below $500

FICO Scores: EQ 620, TU 629 (+9), EQ 632 

On 2/19/20 used CC's to fix car. Used stimulus  check to but amounts back paid store cards to zero plus other bills.

[sarge12]

In 2007 a member named TheNewWorldMan posted a definitive guide to what those numbers in the fico score mean, I will leave the link to the thread for your enjoyment. It is not only likely truer than many would like, it is hilarious.

https://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Interpreting-Your-FICO-Score/m-p/69095