Why the score drop?

[Anonymous]

Hi all,

My FICO for TU was 720 last September when I first looked into refinancing my mortgage.  I decided to go with a different broker recently but when he pulled my score it was down to 691.  The only differences I can tell are: 1) my balance on my amex went from around $1000 to $5000 due to some as yet unreimbursed travel; and 2) I have had 6 credit inquiries because I began shopping around for brokers.

I have no late credit card payments, but one collection account from 2003 (my landlord agreed to pay my final gas bill before I left overseas for one year and never did, so I returned to find this account, which I paid as soon as I found out about it).  I have a mortgage with a $219K balance and student loans around $40K but otherwise no other loans and several long-standing credit cards with high limits.

Can someone explain why my score dropped so much; what steps I could take to get it up and how long that might take?  Thanks!

[SCF]

Hey bardogg, welcome to the forums!

I think the source of your score change may be your increased CC balance.  What is your overall utilization for credit cards?  Basically, what percentage of your available credit limits are you currently using?

Here's a couple of resources to get you started on understanding everything that goes into your score as well:  Credit Scoring 101 and the myFICO PDF Booklet  They're really good reading and should clue you in to if anything else in your reports might be affecting your score.

[Anonymous]

Thanks for the reply.  My overall usage is 12% (with the 5K balance).  How long will it take to go up if I pay most of that off?

[GFer]

As soon as the new balances report. That depends on when the cc company reports and then when the cra updates. Mine are usually within 10 days of my due date.

[Junejer]

Hey bardogg, another reason besides the CC balance util, could also be the version of FICO that the two brokers are using. About 50% of lenders use Emperica Classic '98 and about 50% use Emperica Classic '04. There have been known score differences between the two. My scores were pulled on the same day (on two different occassions) using both versions and there was a 30 point score difference.