My fico dropped 55 points in a month! The ONLY difference was that I have a $2000 balance on my discover card now. Nothing else changed, I went from 16% to 22% utilization. I didnt think it made that much of a difference. Has anyone else experienced this?
What % of your Discover credit line does the $2,000 balance represent? I have heard that if you are close to the limit on any one line, it will lower your score, even though your total utilization is low.
I am currently at 88% utilization but paid down to 27% today. When my CC report I will inform all of the score increase, if any. I hope it's substantial.
That must be it then... because discover doesnt report my limit, just my high balance, and I'm pretty much at my high balance now.. damn I need to fix this.
Revolving cc debt makes up 30% of your entire fico score. Yes, a high balance on one card even with low balances on others will affect your score. One of my negatives one time was too high a balance on 1 or more revolving accounts. My other negative was too high balance on all accounts put together so it was a double whammy. Fico is dumb. My favorite is transunion now. One negative is too many recently opened accounts. The other is not enough accounts. the 3rd is too short history on accounts. Basically I need more accounts but if I get more accounts I ruin my age and I have too many. It is a never ending circle of pain.
I always hesitate to make blanket statements about FICO scoring because with all of the different scoring models, strange things can happen that defy the norm. But, that being said, we have found that 50% is the magic "per account" utilization number for FICO. There are two issues that had dramatic impacts on our scores....far beyond what they should have had considering the dollar amounts involved. I'd have to go back and dig for the specific number of points but the drops were in the 20-25 point range for each of these things. 1. Having a single revolving account that goes to 50% or more utilization. 2. Having over 5 revolving accounts with a balance. Any balance at all. Why did these issues stand out so clearly? With over $100K in tradelines, a Cap1 card with a $300 high credit (since they don't report the limit) and a $179 balance caused one of these 20-25 point drops. The points were restored when the balance went to zero the following month. (All else was consistent.) Our 6th revolving account with a balance was Sears. We had a $9 monthly charge being charged to the card and it was sock drawered otherwise. When we paid the $9 ahead of the statement so the end of statement balance was zero, our revolving accounts having balances dropped to 5. We got the 20-25 points back. I can't guarantee this is how it will work for everyone, but it has held true with both of our EQ reports. And we have seen it happen multiple times. This is why we always recommend that those paying off cards be careful about how the funds are allocated. You can make a huge difference in your scores by how much you choose to pay off on which accounts. BUT...keep in mind maximizing your scores may not be the most cost effective in terms of minimizing the interest you pay. Since we are still obtaining credit for our business, there's an interesting balance we constantly deal with between taking advantage of the great financing deals (0% and such) and keeping the scores high enough to still be attractive to lenders. DemPooches
You guys are right on regarding not allowing any single account to use more than 50%. I just opened a loc in August. They are reporting it as a revolving acct, which it is. But, it shows the balance owed the same as the credit limit and I just lost 32 points because of it. When I saw that, I paid it down 50 % and disputed it. This was last week. Today it comes back verified. I just paid it off in person this afternoon and have sent an email to Robin Holland asking her to fix this as I am in the house hunting mode. This crap always comes up at the wrong time.
