Why the Mystery...Frustrated at Dropping Score and Have No Idea Why

[Anonymous]

My wife would say I am almost compulsive about my credit...if I borrowed money I am going to pay it back on time or early.  For decades, my credit scores have hovered around 830-840.  These credit scores are still high but FICO has been dropping over several months.  The reasons stated are high uilizations (I have paid off mortgage and. have no credit balances except for a few hours...I typically pay in advance) and today the FICO report on AMEX said I had a missed payments.  I “missed” one payment about eight years ago which was really an error by a big box store which they admitted but never removed the report.  That report has aged out and never seemed to impact my score.  My son is repaying a student loan for which I co-signed, but he keeps current.  Experian and Equifax show nothing negative and my scores remain high (they dropped a little when I paid off my mortgage five months ago), but FICO keeps dropping.  This seems so unfair when no valid explanations are offered.  The only reason I am concerned is that we are considering building our “last” home and might take out a small mortgage and I am concerned that this phanthom drop might effect my loan rate.  Any suggestions about how to find out what is really happening?  Thanks in advance. 

[LakeLife]

I am not sure about your dropping FICO, but I will say anything over 740 or 750, and I doubt you have anything to worry about with your anticipated small mortgage.  Honestly, anything over 700 will net you a very good interest rate.  

[Anonymous]

For optimum scoring you need at least 1 balance reporting each month...doesn't have to be much but, has to be something like $5

You get points for isnstallment/morrtgage loans reporting up to 30 and you lose up to 30 when they close out.

You should still be in the high 700's w/o the loan and a small balance.  Might drop to 760 if you $0 all of your balances for the month.

If you don't have any big loan / CC plans then just setup Auto Pay for the Statement balance and just check accounts periodically for anything out of the ordinary.

[Anonymous]

OP, what is the source of the scores you're referencing?  You referenced 840 scores at one point, but didn't say what your scores are now and didn't say if the score source for your ~840 and your score now is the same.  I'm trying to eliminate the potential variable of different scoring models being compared here, which would be an apples to oranges comparison.

Do you have access to your Fico negative reason statements?  It sounds like you do at least in part, as you referenced high utilization.  With your revolvers though, that shouldn't be an issue if you're always paying things off right away/early as you stated and your reported balances are 8.9% or less of your credit limits.  You mentioned a loan though and if the utilization on that loan is > 8.9% (which it probably is) it can easily generate a negative reason statement pointing to that... although I'd expect to "loan balances" referenced, not something that could suggest revolving utilization.

If you had a late payment 8 years ago that shouldn't be seen on your CR currently and thus shouldn't be impacting your scores.  If you never saw your scores decrease at all, it sounds like it was never 30D late, perhaps just late inside 30 days where you incurred a late fee or something and it never made it to your CR.

Assuming you're managing your credit accounts appropriately (on-time payments, low utilization) there is no reason your scores would ever drop significantly to the point of making top-tier mortgage rates questionable.  It's really just your age of accounts factors that come into play on a thick/aged file... so old accounts dropping off can lower your AAoA (or AoOA) and if you apply for credit and open a new account you can take on inquiries and of course reset your AoYA.  

How recently did you co-sign on that loan?  Prior to that, how old was your youngest account?  If you opened the loan (say) 3 months ago and at the time your youngest account was (say) 18 months old, dropping from 18 months AoYA to 0 months AoYA would cross the 12 month threshold, which typically results in a 20-25 point drop or so on most profiles.  You would have seen that drop when the new account landed on your CR.  Those lost points would return when the account reaches 12 months in age, assuming you don't add any new accounts between now and then. 

[SouthJamaica]

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@Anonymous wrote:

My wife would say I am almost compulsive about my credit...if I borrowed money I am going to pay it back on time or early.  For decades, my credit scores have hovered around 830-840.  These credit scores are still high but FICO has been dropping over several months.  The reasons stated are high uilizations (I have paid off mortgage and. have no credit balances except for a few hours...I typically pay in advance) and today the FICO report on AMEX said I had a missed payments.  I “missed” one payment about eight years ago which was really an error by a big box store which they admitted but never removed the report.  That report has aged out and never seemed to impact my score.  My son is repaying a student loan for which I co-signed, but he keeps current.  Experian and Equifax show nothing negative and my scores remain high (they dropped a little when I paid off my mortgage five months ago), but FICO keeps dropping.  This seems so unfair when no valid explanations are offered.  The only reason I am concerned is that we are considering building our “last” home and might take out a small mortgage and I am concerned that this phanthom drop might effect my loan rate.  Any suggestions about how to find out what is really happening?  Thanks in advance. 

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You haven't given us any information.