I just got an alert from MyFico that score decreased by 19 points! I have another thread here about my efforts to clean up my credit ("Trying to clean up but feeling incompetant...") I am working hard to get a few points here and there, and just as things start to look a bit better, I get this hit. Last week, I took a cash advance on both Cap 1 cards, trying to buy a little time (about 1-2 weeks). I knew this would be a short term thing, and that I could pay that to a zero balance by the due date. Today, one week after the transaction, Cap 1 reported my balance to my CR, even though the bill is not due until Aug. 8. a 19 point hit for this - my score is now back down to 598. I am expecting my disputes to have a final outcome in 1-2 weeks, and I already know some of those results (posted in my other thread) I know there are a few deletes coming, and I expect my score to rise with that. Also, in that same time frame, I expect to pay that balance back to zero, and I will expect my score to rise with that, and I expect that gain to be AT LEAST the same 19 points I just lost. This doesn't seem fair to do - report a balance that is juts days old, that is not even due yet, and certainly not past due. Taking a hit for being late is one thing - taking a hit for using the card is another. I usually charge maybe $20 (gas), then pay it online within a few days, just to have card activity, but always keeping a zero balance. This transanction is only about a week old! Ok, I've learned - sock drawer, I think. Do all cards work like this? Do they all report when you put more on your charge, even if the bill is not overdue. I thought using a charge was the way to build credit. I used it and took a hit in my score.
If you are using close to your available credit, your scores will drop until you pay some of it down. If you want to minimize the impact of using credit on your scores, you want to build up your available credit to several times what you expect to actually use. CCs generally report your current balance, your highest balance, your credit limit, your last payment, and whether it was late 30 days or more. Cap One generally does not report your credit limit, in which case the scoring systems appear to use your highest balance. So if your current Cap One balance is near your highest balance, it looks like you have maxed out the card. On the other hand, if you at least once run the card up near its limit, then pay it off and usually use it to lower levels, it will affect your scores similarly to how it would if they reported credit limits.
Well maybe this will work out then. Right now, my card is used to most of the available limit, and after I pay it off by the due date, then if I continue to use as I have before (in little amounts and pay off withing a couple days and always have a zero balance), than maybe that will actually help my credit look good. (maybe even better than before?) I just don't like to see that 19 point hit while I'm anxiously looking for a better report any day day from the disputes I made. I'm afraid this hit will negate any positive gain I made with disputes. After I pay it off soon, will I get my 19 pts back? Or will I get even more points for being a good bill payer of a large amount? Or will I get just a few measly points?
Feels like when you are really doing good, you only get a couple small points to the positive, but when you do something that isn't even horrible, you get penalized a ton of points. 19 points is a lot!
Relax. When you pay it down, your score will have a positive reflection. I went over my limit and it was reported and my score dropped but when I paid it down the next month, then the point came back with a few extra.
Almost the same happen to me, I had a balance that exceeded 40% of my total credit, even though I pay my card off in full every month I took a -15 pt hit reported by MyFICO. But get this I took a +12 on Experian, go figure.. I Sent in the dispute but within 2 weeks it was back up +18 on MyFICO for reasons unknown.
Well good to know that's how it works for everyone, and not just me! As you may know, I disputed about 2 weeks ago and have been anxiously waiting to see the results. I have some early results that look good, and I am hopeful to see some good things any day now. So while I am looking every day for this info, today I get an alert from MyFico and got excited, only for a second though, until I saw the subject line that said -19 pts. I cried. (really) Also, my score now is close to what it was a year ago, when I began addressing things - very disappointing to see all of that reading, learning, asking, watching my reports, etc...to see all of that effort get me nowhere a year later was very disheartening. But, if it ultimately will be ok, then I'll not feel so bad for now. I'll wait to see how it all plays out, hopefully soon. Thanks for letting me know.
I know your pain Suzie.. My plan is to keep my 1 Credit card at no more than 20% of the limit every month, and pay it in full every month, on time. While doing this I would hope it shows that I have good activity, and a low balance. Besides, the credit card i have from 1st Premier I believe try's to screw most people trying to repair thier credit. If you thing C1 has strange practices check this out. If 1st Premier recieves my payment in full 1-2 weeks early, and cash the check. They don't apply it to my account until 10 days have past, saying they need to verify the money has actually been transffered. In doing this they don't apply it to your account, but even if the clearing process goes past the closing or due date they don't report it late, which is good.. The bad point is if you charge on the card they do charge you a over the limit fee, even though they've already recieved your payment. Now all this can be avoided if you pay a $25 electronic processing fee.
all the posts are really right on information in this thread. when it is all said and done, this will definitely help your score by reporting the higher limit. if you get daily monitoring, you need to make sure you know right when each of your creditors are reporting, so you don't have a major drop in your fico when one of them reports (when you have a balance) at an inopportune time (usually right when you are about to apply). i have found that you can never predict 100% exactly when they will report, but is usually pretty consistent. this is usually right after your end of your statement date. obviously it is better to have a low balance, but this way you know exactly where you stand when you apply for credit when you are ready.
