I went to pick up a new car thinking that my credit would be perfect. I was shocked when they offered me 8.74% on a new car loan at the dealership. We went over my credit report together. There's not a SINGLE negative entry on it. I have ONE credit card with an $1100 limit that's maxed out at $1050 or so. Will that one entry lower my credit score that much? I have a 618 score. I'm a homeowner, no late payments on nothing... I don't understand. I'm devastated at this. I've been responsible with credit for 7 years. My score should be well above a 618. Does anyone have any idea how much one maxed out (but not over limit) card can lower one's credit score?
I went from 40% utilization to 60% utilization and my score dropped 25 points... so yes, using more credit is definitely dropping your score. One option is to get more than one credit card... if you had one more credit card with 1100 CL and only used it for a small purchase here and there and paid it off each month, then you would only be utilizing 50% available credit-- big, big difference! But there is also the issue of AGE... how long have you had that credit card? Also, how many inquiries do you have? These things matter.
Hi Nevo, welcome to the board. In short, NO. I don't think a max out would cause that much of a drop. I could be wrong. Seems that you should be around 680. That said, there HAS to be other things going on. Examine your report carefully. Are you certain there is NO other neg. info.? What about inqs.? This IS a little baffling. The first thing I'd do is postpone the car deal for now, pay off the CC and see what happens. Should be interesting.
Do you have any other auto installment loans on your CR? The number of inquiries makes a big diffrence too, as does the length of your credit history. I can tell you though, if you pay down that card below 10% of the credit limit, you can expect at least 30 points added to your score, possibly 40.
I might be out of line, but don't car dealers kinda go by a different scoring model?? If their aren't any other car loans on the report wouldn't that kinda lower the score? That was my first thought, sorry if I am dead wrong...
Thank you for the replies. No, there really are no late pays on the report, all items are I1 or R1. I have a VISA that is just under maxed out, and an AmEx card that is of course paid off monthy. Current accounts are: -first mortgage, borrowed $83,650, balance $82,764 -second mortgage, borrowed $10,100, balance $10,000 -AmEx, shows $1091 balance (paid in full monthly of course) -VISA, credit limit $1100, balance $1049, no late pays -Ford Motor Credit, closed account 3 years ago paid in full. I did have late pays on this loan, but that was 5+ years ago. -Lowe's card, limit $1400, balance $441 -Student loan sallie mae, ~$10,000, refi'd last year this time The mortgages were refinanced in 2/03. While I would like to put off buying the car, Dodge's $2500 rebate program is scheduled to expire Monday and I'm afraid that sooner or later they might be serious about those rebates. The dealer also put a spray in bedliner in the truck for me based on the assumption that I'd buy the truck. I may have some inquiries since I refinanced the mortgages 3 months ago. My credit history spans 8+ years. I'm 31. The "CreditXPert" 3-in-1 reports suggest that the biggest dings to my credit are: -using 95% of my credit limit -credit history, avg age of accounts is 2 yr 10 mo -missed an auto payment (5+ years ago) Argh. Very frustrating. My loans are all new because I refinanced them recently! (Mortgages, student loan.) That's *smart* use of credit! Well, I guess I'll pay VISA and Lowes, and refi the auto loan in a few months. Rats.
OK, your utilization is very high. Not just on that one card, but when combinung all cards, it's high. The AMEX won't report a credit limit, so the utilization is generally based on the reported high balance. Is the current balance close to the hogh balance? Also, do any of your other loans report as revolving credit? I don't think it's really utilization that is kiling you - I think it's the one late on the auto loan. When shopping for an auto loan, past problems with auto loans are the biggest factor they look at. Sure, it's 5+ years old, but an auto dealership would much prefer to see a late on a credit card than a late on an auto loan.
Re: Re: Shocked at my low score! -using 95% of your credit limit is really hurting your scores. When you start to pay down some of your debt you will see your scores rise.
Re: Re: Shocked at my low score! Sigh. I thought I was doing myself a favor by having only one credit card with an insanely low limit. I do appreciate the feedback, all. Maybe I can get the loan at the offered rates and refi in a few months after keeping AMEX and VISA paid down. Comments?
Re: Re: Shocked at my low score! my hubby's in the car business. He said that they use a different scoring model for automotive financing. So don't think that 618 is your score for other types of credit.......hope that helps
Re: Re: Shocked at my low score! As for using different scoring models, when I bought my car last year, they pulled Equifax. The score they got was exactly the same as the score I got an hour before when I pulled my report and that is the score they used. No different model here. Butch, how can you estimate what you think a score should be before any of his info was reported? I'm surprised at you for that one. Walkerjks, a 5 + year old late has very little if any negative affect on a score. A car dealer may want to see a late on a credit card rather than a car loan, but what they want doesn't affect a score. You better think again about the utilization. Fico likes individual revolving accts to be below 50% used and, total combined usage of revolving accts below 50% of the total limits. If you are maxed on those 2 cc's and those are the only 2 cards you have, you can get a huge increase in score by paying them down to below 50%. Paying down credit card balances is the quickest, surest way to increase a credit score. Period. No ifs, ands or buts.
Re: Re: Shocked at my low score! The problem might be that you haven't borrow more on credit cards in the past so they don't know if you can handle large credit lines. I would imagine that the low cl on your visa is hurting you. It makes you seem like a beginner to credit in comparison with those who have borrowed a lot and paid back a lot.
Re: Re: Shocked at my low score! If you could get a couple of VISA/MC with $5,000 limits and keep them almost EMPTY...it would help your DEBT TO CREDIT LIMIT RATIO... Use the 2 cards for a tank of gas or groceries 3 or 4 times a year and keep them in the SOCK DRAWER...
