Why is my FICO Score Falling

[smallfry]

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@Anonymous wrote:

Perhaps the score dropped because of the age of the trade line. It may have been because it impacted your length of history a little. Sucks, I know, but that's the game.

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What I know about the credit game you can fit in a thimble but this answer seems to come close to what probably happened. Short history is a negative. That's why I would be reluctant to drop a CC with a smallish CL that I had for a while. AF would be the only deal breaker for me.

[smallfry]

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@Anonymous wrote:

Yeah I think the credit scoring ssystem is just strange. Something that was a positve suddenly becomes a negative simply because the system decides an TL is too old to be on the credit report...

Lower credit scores of course increases chances of increased borrowing costs (and insurance costs as someone mentioned in an earlier post).The only other place where the odds are stacked like this is in casino's.

I guess the only way to win is to not borrow money and stay out of the casino's.

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Definitely stay out of the casinos. Best way to play the game from what little I've learned lately is to borrow a little bit and pay NEARLY all of it back right away. Do it every month.

[Anonymous]

Smallfry,

Yes you are correct about borrowing as little as possible  and then paying it off every month.  That incidentally is what I've done over the past  two or three years and my score went up (above 800 and I believe EX and EQ scores are still at or above 800)...but my scores sort of peaked and are now trending down...despite no new TL, lower debt, and everything else going right.

What seems to make the most sense so far is that

1. The Bucket Theory-   I may have gone into a new bucket.  It makes some sense but only to a point. I don't understand really fundamentally that my score went down because I went from the Gold Bucket to the Platinum Bucket.

My Comments about avoiding casino's and debt all together is half serious and half tongue and cheek. The half that's tongue and cheek is the part of me that prescribes to the  UCKIT Theory with the first letter in the word UCKET being an F.

2. That old CL's can negatively affect your score ..if they were positives and just becuase they age out of our credit reports ..this action may at least temporarily lower my credit score.  It's like the dealer at a card table at a casino taking out a card temporarily because we've won too many times.

3. What fundamentally bothers me the most is that the lower score could cost me money..assuming it could float lower depending on the lunar cycle, how many people fly into Bostons Logan Airport divided by how many people fly out of  LAX, and of course the amount of carbs I had the past month.

[SoulSmilen]

You can't have it both ways - it's either fair or it isn't regarding the age of accounts. If the scoring is going to score based on the average age (which it is), then that factor has to be consistent (which it is).

If I have one old account from 6 years ago when I open a new account, the average age is going to be factored into my score. When I reach the 7 year mark and the old account drops off, my average age of account on the remaining account changes which is fair and accurate; it is also a fair predictor for credit worthiness, like it or not, which is the purpose of scoring.

[Anonymous]

Soulsmilen,

I agree with you in a general way. If an aged account is helping you and when taken off  our CR...  then it no longer helps.... and therefore score can drop by amount that old CL was previously helping you.

However who does this formula really benefit if you think about it.  We shouldn't have to borrow more just to keep our score at a high rate. Usually when people use lower and lower amounts of their debt they have adopted a "live below ones means" attitude and in my experience these individuals are truly the best credit risk.

In my case incidentally that isn't why my credit score has been trending downward..at least that's what I believe..I'll have to take a closer look at my CR.

I'm more or less just complaining about some of the oddities of the FICO system that should have a neglible if a neutral effect on the score. Perhaps another way to look at it...as an old CL heads toward the great FICO score in the sky..it should have a smaller and smaller effect on the wieght of our scores.

Does this make sense

[smallfry]

We shouldn't have to borrow more to keep our scores high. Hmmm.

[Anonymous]

I guess I think the formula for FICO scoring should be reworked so people aren't automatically penalized for keeping it simple. Frankly I would care less about this decision if Insurance Companies didn't  use this score in determinng how much we pay for car, house insurance.  Ultimately you can avoid most borrowing if you choose..but car and house insurance are a necessary evil.

[Anonymous]

todd,

The tax code ain't simple. Why should this be any different?

[Anonymous]

ok well I just checked my EQ credit score and it's about right...still 800+. They do not have short length of credit history as a factor...although both EQ and TU have the same info on length of credit history...TU just says it's a negative factor whereas EQ doesn't and the difference between the scores is 15 points.

I must admit I am less concerned now that one of my other scores has stayed stable...although I think they should increase a little..I won't complain too much.

The tax code isn't simple and that needs overhaul as well..The Alternative Minimum Tax is a prime example.

[Anonymous]

todd,

What's your CC util? That's a way to bump up your scores that totally in your control. You can also beat on your CCCs to raise your CLs and lower your APRs.

http://ficoforums.myfico.com/fico/board/message?board.id=generalcredit&message.id=4120&query.id=1356...