@IcyCool7227 wrote:My Equifax score went down 43 points with Credit Karma. It finally detected my Capital One Savor One account but I'm guessing it went down that much because there's a balance of $697 out of $1000 credit limit? I have almost 14 more months of no interest being due on purchases. It's odd that Credit karma only mentioned the new account not the credit used. I didn't know it could go down that much. Will it recover eventually once the balance is down a lot?
You're fussing about a FAKO/Vantage 3.0 score; those scores have nothing to do with FICO scores.
@IcyCool7227 wrote:My Equifax score went down 43 points with Credit Karma. It finally detected my Capital One Savor One account but I'm guessing it went down that much because there's a balance of $697 out of $1000 credit limit? I have almost 14 more months of no interest being due on purchases. It's odd that Credit karma only mentioned the new account not the credit used. I didn't know it could go down that much. Will it recover eventually once the balance is down a lot?
Credit Karma's Vantage 3.0 scores are not FICO scores. They are much more volatile, and often unpredictable.
Reporting 70% utilization on a card will hurt one's FICO scores, but it wouln't be by 43 points.
That's very common in my experience, a small balance can trigger +25 points loss while my Fico scores remain intact.
@JohnIsHere wrote:As you might be aware, there are quite a few factors that go into your credit score. Without knowing exactly all of the details in your situation, it's difficult to say why your score went down that much. But, here are a few factors that might be at play here:
If the average age of your other cards/accounts is not that old, and if the Capital One Savor One is a new account, then it is possible that the new account brought down your 'average age of credit'.
Another factor is your overall credit utilization. If that $697 out of $1,000 is similar to the amount of credit that you're using on your other cards, then it's possible that your score decrease is because that 70% utilization on that one card has brought your overal utilization up too high.
Also, again if the Capital One account 'is' new, then that means there was likely a hard inquiry when you applied for that card. If that inquiry is just now showing up on Karma, then that will also knocked a few points (usually around 4 to 6) from your score.
And of course, if you have any late payments on that Capital One account, that will hurt your score more than any other factors.
And the answer to your question is 'maybe' - that if you pay down the balance on that Capital One card, it 'might' help your score. 70% utilization on 'one' card is problematic. But, as said earlier, if your total utilization (the amount of credit you're using relative to your credit limit) across all your cards is high, then paying down just that one card might not do much to bring your score back up. Add up all of the balances that your have on your accounts. Then add up all of your credit limits. That is your utilization.If you have 5 cards with $1,000 credit limit each (for a total of $5K available credit).
And you have a total of $3,000 charged when you add up all of the balances,
then that means your utilization is 60%, which is too high for a good credit score. Under 30% is the minimum level for a good score. Under 6% is the best level to shoot for.
Good luck.
While this is all great advice for FICO scores, for Vantage scores, which is what CK provides, most of it doesn't apply, since the algorithm is very different and as noted above, very volatile.
@SouthJamaica wrote:Credit Karma's Vantage 3.0 scores are not FICO scores. They are much more volatile, and often unpredictable.
Reporting 70% utilization on a card will hurt one's FICO scores, but it wouln't be by 43 points.
I had a nearly 60 point FICO 8 drop this past summer. I used my lowest CL card for all of my travel expenses (for the rewards) and it briefly went up to about 80% utilization on that card, but still below 10% utilization overall. Nothing else changed; no new accounts, no late payments, no accounts closed. Once I paid it off, my score quickly recovered.
So at least in my experience, FICO 8 can also be volatile to the extent it appears quite sensitive to an individual card's utilization.
The good thing is that utilization has no memory. Return it to its previous level, score returns immediately... you'll be fine once paid down.
