Hi. Help me, please. I bought a new car 3 months ago. Paid $20,000 with car loan and $10,000+ with my credit card. I paid off $3000 one week after that and $2000 last month. My credit scores dropped to 665(from 740) October and dropped to 650 November. I only have 2 years credit history, but I never had any debit before. I have 40,000+ total credit limit with 6 credit cards and one unlimited cold card. What can I do to raise my scores again? I do not have enough money to pay off all the debit now. My credit scores will keep dropping?
Well, a quick guess is that you've taken a big hit on your "utilization", or ratio of credit used/credit available. This is a heavily weighted category in the FICO scoring model. You've also added another "new" account, bringing down your already "short" history. Not as major a scoring category as utilization, but it is an impact. There is also the reporting timeframe, it's probable that the CC payments haven't caught up to the reporting yet (per your posted time frames). In short, wait it out, keep paying your accounts on time, pay down your CC balances, and let time do its thing. Your scores will come back.
Thank you so much. I did not realize less than 1/4 ratio of credit used/credit available would make such a big change. Do you know if the score will keep dropping more every month before I pay off all the debit? Thanks again
Barring any other changes to your report, the total drop is usually immediate, and the recovery is slow and steady.
Exactly what jlynn said. It should start climbing again. As Bizwiz said, maybe the big payments haven't hit yet. When they do, that will help your score increase. Each month should bring an improvement.
The FICO model is quick to penalize and slow to reward. Seeing a dramatic rise in the short term is unlikely. May take 6 months or a year to fully recover.
