dropping FICO score discouraging - any tips?

[hyprble]

Hello,

I wasn’t exactly sure which board to post on, so apologies in advance if I’ve posted in the wrong place!

This community has been an amazing place to educate oneself about finances and credit scoring.  I was ecstatic to see my score jump over the 700s and remain there consistently.

I’m actually posting for some moral support.  In the past, using the myfico ScoreWatch has been keeping me motivated by tracking my increasing credit score.  Unfortunately my score has either been staying the same or dropping over the past few months, and that has been discouraging.  I am paying down a balance of $28,000 (I know, I know, I learned my mistakes the hard way and the only way out is to pay this down responsibly as quickly as possible).  In the past few months, one inactive account closed (thus losing a $500 credit limit), and another card chased down my balance so I was only $25 under the credit limit.  One closed account also dropped off my credit report bringing down my AAoA to 7 years.  After all these changes my score has dropped to 709.  Each month I’ve been paying down my balance by at least $600, but I don’t see my score budging.  I have not added to my total balance at all.

I feel like even though I’ve been doing what I can to get my score up (paying down my balances), my score is not budging, and it’s discouraging.  I feel like I should cancel my ScoreWatch since I only used it as a motivator, and it’s rough seeing my score lower.  I know when all is said and done, and all my consumer debt is paid off, I won’t have to worry about a low credit score, but for now what I am looking for are some words of encouragement to keep going despite my credit score decline.

Right now I have a budget sheet that shows my balance going down.  Should I just ignore my credit score for now?

[AndySoCal]

The lower score is probably a reflection of a combination of the things you mentioned in your post. Keep the course you are going on about paying down the debt. Watch the score factors that are hurting your score and see what can be done if anything to address that. An eight point drop is not that bad all things considered.

[RobertEG]

I speculate that your initial, rapid increase was because you were previously in a higher risk FICO scoring bucket.

As you score increased, you are now being evaluated against a totally different "class" of credtiors, so improvement typicall slows down.

Once above the 700 mark, you maintain, and dont necessarily improve, your score by making timely payments.  That prevents derogs.

Account aging takes years to have any significant FICO affect.  % util is your main tool for short term FICO increases.

Whether to be concerned monthly about your current score is primarily dependent upon you plans to obtain new credit.

Your score really is only of concern to others when you apply for new credit.  So I would not be fixated unless a major new credit transaction is in your immediate future.

Credit scores follow responsible use of credit, and knowlege of how credit reporting works.   You know how to do that.

My advice is to fixate on reducing account % util, and leave the daily and monthly swings of your credit score to a time and place when you are ready to apply for new credit, and thus the score has real meaning.

[Anonymous]

The score only really matters if you are looking to obtain new credit.

I just recently dug myself out of debt.  At its worst it was probably somewhat similar to yours.  When you finally get free, the feeling is unbelievable.  And it just gets better once your finances start to get into positive territory.  That is your motivation!

So keep up the good work.

[Anonymous]

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@Anonymous wrote:

The score only really matters if you are looking to obtain new credit.

I just recently dug myself out of debt.  At its worst it was probably somewhat similar to yours.  When you finally get free, the feeling is unbelievable.  And it just gets better once your finances start to get into positive territory.  That is your motivation!

So keep up the good work.

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Nicely put!

[hyprble]

Thanks again everyone for your kind words of encouragement!

I don't plan on applying for any new credit in the next year (unless my 14 year old car dies), (and who knows when/if I'll ever be able to afford property?) so I'll keep chugging along paying down my debt and watching my balance go down!  I may try to get a person-to-person loan to axe out one of my high interest cards, but other than that, I won't be adding any inquiries to my CR.

The only thing that worries me are the cards that chase my balance, but at least with the new credit card reform I don't have to worry about my APRs going up arbitrarily!  In fact, once I'm debt free I will be sure to NOT use any of the cards that gave me AA.  Here's to hoping to at least see some kind of number improvement by the end of the year :-)