Using an inactive card lowers fico score Im confused

[kuku4koco]

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@taxi818 wrote:

Using a dormant card does not actually effect the score. it just triggers an alert thru fico. What ever was going to happen with your score was going to happen anyway regardless of using a dormant card. Most like cause is utilization. But this is a trigger to get an alert. just like getting and inquiry. or in my case. new employment reported. Only thing changed was the way they spell it. its the same company.  The new address triggered the alert and it said my fico score went down 3 points. But i already knew it was going to go down since i just bought a new car. and got 6 new inquiries. But they seem to be only counting as one. Fico is very complicated and once you start to reconize the triggers you will easily figure out the true cause of score increase or decrease.Evidence as to what im trying to explain below.

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Then why don't they just give the REAL reason for the score drop or increase??? I don't get this.... Is it because they don't want anyone to figure out their algorithms?

[Revelate]

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@kuku4koco wrote:

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@taxi818 wrote:

Using a dormant card does not actually effect the score. it just triggers an alert thru fico. What ever was going to happen with your score was going to happen anyway regardless of using a dormant card. Most like cause is utilization. But this is a trigger to get an alert. just like getting and inquiry. or in my case. new employment reported. Only thing changed was the way they spell it. its the same company.  The new address triggered the alert and it said my fico score went down 3 points. But i already knew it was going to go down since i just bought a new car. and got 6 new inquiries. But they seem to be only counting as one. Fico is very complicated and once you start to reconize the triggers you will easily figure out the true cause of score increase or decrease.Evidence as to what im trying to explain below.

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Then why don't they just give the REAL reason for the score drop or increase??? I don't get this.... Is it because they don't want anyone to figure out their algorithms?

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Because the monitoring solution only has so many triggers.  I'm happy Equifax has so many triggers TBH, even if they're not 1:1 correlated with the score change.

[Anonymous]

Same thing just happened to me. I charged $4.10 on a card I hadn't used in three months which has a $10k limit so utilization should not be a factor and my score dropped 4 points. The point drop and the newly active account were in one alert.

[Anonymous]

Hi Argo.  You are right.  Utilization is not a factor in your score drop.   But a factor that was almost certainly affected is the "number of tradelines reporting a balance."  I note that you have a relatively small number of credit cards (three total).  So going from 1 card showing a balance to 2 showing a balance (say) causes your profile to go from most of your CCs showing zero to most showing a balance. 

This factor is discussed a lot on the Forum. 

If you had (say) nine cards, then going from 1/9 to 2/9 would probably have not caused this factor to come into play.  In your case you went from 33% to 66% -- or from 66% to 100%.

[Thomas_Thumb]

Agree, the score change factor is appears to be an increase in the # open accounts reporting a balance. Cards that are rarely used probably trigger an alert and that may then prompt a re-scoring. The reported change in UT% due to the OPs $100 charge or subsequent poster's $4 charge likely has a trivial influence on aggregate utilization.

Note: Impact of # open accounts reporting on score is profile dependent so it is hard to be definitive on point change.

It is a good practice to use cards periodically to avoid a potential CL reduction (or closure). Whether or not you pay balance before the charges post on a statement is a personal decision

Don't sweat the small stuff.

[Anonymous]

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@Anonymous wrote:

Hi Argo.  You are right.  Utilization is not a factor in your score drop.   But a factor that was almost certainly affected is the "number of tradelines reporting a balance."  I note that you have a relatively small number of credit cards (three total).  So going from 1 card showing a balance to 2 showing a balance (say) causes your profile to go from most of your CCs showing zero to most showing a balance. 

This factor is discussed a lot on the Forum. 

If you had (say) nine cards, then going from 1/9 to 2/9 would probably have not caused this factor to come into play.  In your case you went from 33% to 66% -- or from 66% to 100%.

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I've actually got around 14 cards, I forget exactly, with about $150k total CL. I just haven't put them all in my sig. That is why this confused me. I have a relatively high balance on a balance transfer deal on one card but my total revolving utilization is less than 10% of $150k and like I said two thirds of that is in a 0% BT.