Why did my score go down?

[Anonymous]

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ByrdMan wrote:

Cheddar, I know that HELOCs count as installment at around $50M. I hadn't heard that CCs do that. I just looked at an old CR. My $25M CC is revolving. Maybe someone else can weigh in on this.

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Ahhh, that's right.  That is probably what I was thinking of.

Good catch, and thanks for refreshing my memory.

[haulingthescoreup]

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@Anonymous wrote:

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@Junejer wrote:

Cheddar, I know that HELOCs count as installment at around $50M. I hadn't heard that CCs do that. I just looked at an old CR. My $25M CC is revolving. Maybe someone else can weigh in on this.

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Ahhh, that's right. That is probably what I was thinking of.

Good catch, and thanks for refreshing my memory.

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In fact, we've had a few members to whom this has happened. One has a long-time account at a local credit union, and at some point, they started reporting the account as installment (seems like it was around $40K.) This was pretty damaging, because as I recall, the member only had one or two other cards, store cards maybe, and lost all the leverage that revolving credit can provide, once you know how to work it. I think it was the same member who then got a new card that turned out to be one of the high-limit cards that don't report limits. Pretty frustrating!

I don't believe that revolving automatically switches to installment when the balance hits a certain point; I got the impression that it was just a decision by the CU to report differently. The subject popped up while we were in the middle of trying to figure out the magic number for HELOC's, and I think there was some tangling up of the two topics in the debate.

[Anonymous]

My whole point is that the scoring system is useless if people with excellent credit are reported as lousey, and people with risk are reported as good.  My score has fluctuated between 696 and 796 in the last 12 months solely based on credit card balances, even though the cards are paid in full each month.  Balances paid in full would be VERY SIMPLE DATA to obtain if the scoring agencies wanted it, which would be useful in FAIR credit evaluations.  Why should I have to play a "game"?????

[MidnightVoice]

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haulingthescoreup wrote:

I don't believe that revolving automatically switches to installment when the balance hits a certain point; I got the impression that it was just a decision by the CU to report differently. The subject popped up while we were in the middle of trying to figure out the magic number for HELOC's, and I think there was some tangling up of the two topics in the debate.

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I don't think it is the "reporter" who causes the problem.  My CU reports my Heloc to all 3, EQ calls it "mortgage", TU calls it "other", neither revolving.  EX however thinks it is a credit card

[haulingthescoreup]

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@MidnightVoice wrote:

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@haulingthescoreup wrote:

I don't believe that revolving automatically switches to installment when the balance hits a certain point; I got the impression that it was just a decision by the CU to report differently. The subject popped up while we were in the middle of trying to figure out the magic number for HELOC's, and I think there was some tangling up of the two topics in the debate.

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I don't think it is the "reporter" who causes the problem.  My CU reports my Heloc to all 3, EQ calls it "mortgage", TU calls it "other", neither revolving.  EX however thinks it is a credit card

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I wasn't clear in my first post: this was on a CU credit card, and the member said that for some reason, they started reporting it as installment when it had always been revolving before (as it was a CC.)

My high-limit CC is still reporting as revolving, thank goodness. I hate it when issuers start getting frisky.

[haulingthescoreup]

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@Anonymous wrote:

My whole point is that the scoring system is useless if people with excellent credit are reported as lousey, and people with risk are reported as good.  My score has fluctuated between 696 and 796 in the last 12 months solely based on credit card balances, even though the cards are paid in full each month.  Balances paid in full would be VERY SIMPLE DATA to obtain if the scoring agencies wanted it, which would be useful in FAIR credit evaluations.  Why should I have to play a "game"?????

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A lot of people have noted this. My guess is the reason that statement balance is currently used is because the original statistical research found that this figure was more predictive than balance at the end of the month.

But research uses historical data, and as Americans' credit card use has changed so dramatically over the past decade, I wouldn't be surprised if this switch occurs one day. For instance, the profile of the typical FICO High Achiever is someone who has only 4 or 5 CC acounts, open and closed. Cripes, my 80-year-old mother has more than that. For now, we're stuck with what we've got.

[Junejer]

Congratulations HTSU on hitting 5000 posts! You have taught me so much and your pleasant demeanor comes through your written words. Thank you for being on this forum.

[haulingthescoreup]

Wow, hey, thanks! I hadn't noticed. And that's sweet of you to say.

I wouldn't have gone past 20 if it weren't for all the great people here. I work with nuts and screamers all day. I love being here, away from all that!