Calling all credit card and credit score buffs..

[Danman]

Well, I was checking my FICO score the other day through my Providian account (they provide a free credit check and show the FICO score) and it has dropped 86 points in the past couple weeks! :Q

I was at a 742, now I'm at a 656. I got scared sh!tless because of this. I never missed a payment before and I pay off all of my credit cards in full. Here's the thing. I use my credit cards for mostly business purchases. In the past month, I racked up maybe 3.5k in charges. I just paid them all off yesterday.

Now, when I pull this free credit card report, it says this is why my score is 656:

1. The proportion of balances to credit limits on your revolving/charge accounts is too high.

WTF?! So if I charge up a lot my score drops?! This doesn't make any sense to me. BTW, One of my cards has a limit of 3.5k and the other is 5k. The 3.5k had about 1500 dollars on it, and the 5k card had about 1950 on it.

So what do I do? I'm going to be charging at least 1k a month on my card and I'm not sure what I need to do so this doesn't affect my score in the long term. Any suggestions with this?

 

[Zysoclaplem]

Yes. You charge up alot and your score drops.

 

[royaldank]

Having that balance increased your debt ratio. Once paid off, your score will climb again. Scores don't update instantly and it will be another 2 or 3 months possibly before you see the score start climbing back up.

If you don't like this, take it up with your employer and hopefully get a company card or some other way of financing work stuff.

 

[iamwiz82]

Sub-question - If you have a lot of revolving debt, but you are paying it off every month, will increasing your limit help? That way the balance is not as big of a percentage?

 

Credit scores and credit in general is a scam.

 

[Dulanic]

Yes a higher credit limit will lower your credit usage %. As soon as the CC that you put that much on updates, usually about a month or 2 after the end of the billing period that you paid it off, it will go right back up. It will not effect your score in the long run, they dont keep your balance history on record, just your current balance.

 

[Zombie]

pay off all your cards at the end of each month and all your problems will be solved .

 

[Danman]

Originally posted by: SampSon
Credit scores and credit in general is a scam.

I know. :|

I'm gonna call up my credit card company and see if I can get a limit increase...

 

[richardycc]

Originally posted by: Danman

Originally posted by: SampSon
Credit scores and credit in general is a scam.

I know. :|

I'm gonna call up my credit card company and see if I can get a limit increase...

thats what caused your credit score to go down.

 

[Danman]

Originally posted by: Zombie
pay off all your cards at the end of each month and all your problems will be solved .

Umm...did you not read my thread? :roll:

I do. Every month. Never carry a balance.

 

[TuxDave]

Meh.... I'm pretty sure my credit scored dropped this past two months due to several credit checks by my car dealership and my housing landlords. That and I charged up $3K since I charged all my moving expenses. But then again.... I don't really care. My credit is good enough to get whatever loans I need.

 

[conjur]

Get your utilization down below 15% and your score will shoot back up.

You have to be sure the balance is way down at the time they report to the bureaus (probably when the statement is generated)

 

[Rookie]

Originally posted by: SampSon
Credit scores and credit in general is a scam.

amen. it only hurts the lower and middle class... the upper class uses bankruptcy like a tool

 

[Vic]

Originally posted by: Rookie

Originally posted by: SampSon
Credit scores and credit in general is a scam.

amen. it only hurts the lower and middle class... the upper class uses bankruptcy like a tool

It's still better than debtors prison. Don't like it, don't borrow other peoples' monies. If I lent you money, and you didn't pay me back, would you think I was trying to screw you over when I wanted it back? Or wouldn't it be you screwing me over by refusing to back your debts? Don't like it, don't borrow.

50% revolving credit utilization (not 15%) is what can bring scores down, and makes up 30% of the score. As the OP was not above 50% on either card he mentioned, I think there might be another cause. If this was the first time the OP has ever carried this high of balances, then that is likely the cause.

 

[conjur]

Originally posted by: Vic

Originally posted by: Rookie

Originally posted by: SampSon
Credit scores and credit in general is a scam.

amen. it only hurts the lower and middle class... the upper class uses bankruptcy like a tool

It's still better than debtors prison. Don't like it, don't borrow other peoples' monies. If I lent you money, and you didn't pay me back, would you think I was trying to screw you over when I wanted it back? Or wouldn't it be you screwing me over by refusing to back your debts? Don't like it, don't borrow.

50% revolving credit utilization (not 15%) is what can bring scores down, and makes up 30% of the score. As the OP was not above 50% on either card he mentioned, I think there might be another cause. If this was the first time the OP has ever carried this high of balances, then that is likely the cause.

Below 15% is where you want to be. MyFICO.com even says so.

Also, check out this graph of scores vs. utilization:
http://www.creditboards.com/images/ficogrph1.JPG

 

[Yossarian]

get a higher credit limit on those cards.

 

[kranky]

I think too many people freak about their credit scores. It has little to do with your day-to-day life.

If you're going to apply for a mortgage or loan, then take appropriate steps to make sure everything looks good. Other than that, quit worrying about it. Live your life. What's the point of having credit that you can't use in the way you want to because your actions might cause a temporary blip in your score?

There's enough stuff to worry about as it is.

 

[RossMAN]

Ouch I'd be sh!tting bricks if that happened to me.

Fortunately my credit score is already a crappy 634 or around there

 

[conjur]

Originally posted by: RossMAN
Ouch I'd be sh!tting bricks if that happened to me.

Fortunately my credit score is already a crappy 634 or around there

Geez, Ross...that's not much higher than mine and I'm less than two years out of my BK.

 

[Vic]

Originally posted by: conjur
Below 15% is where you want to be. MyFICO.com even says so.

Also, check out this graph of scores vs. utilization:
http://www.creditboards.com/images/ficogrph1.JPG

I lost respect for creditboards a long time ago, and for good reason. The blind lead the blind in questionable legality.
And though that graph says "myfico.com" on it, it's not on the website. Is it something that comes with a premium package?

I'm not disputing what you're saying, that going above 15% utilization could have a small impact on one's score, but according to the graph, the impact was neglible across the board, an average of less than 20 points. The OP's score dropped 11.6%, or 86 points, consistent with nearly 100% utilization according to that graph.

 

[RossMAN]

Originally posted by: conjur

Originally posted by: RossMAN
Ouch I'd be sh!tting bricks if that happened to me.

Fortunately my credit score is already a crappy 634 or around there

Geez, Ross...that's not much higher than mine and I'm less than two years out of my BK.

Ok now I feel like SHIYATE and I've never declared BK!

 

[conjur]

Originally posted by: Vic

Originally posted by: conjur
Below 15% is where you want to be. MyFICO.com even says so.

Also, check out this graph of scores vs. utilization:
http://www.creditboards.com/images/ficogrph1.JPG

I lost respect for creditboards a long time ago, and for good reason. The blind lead the blind in questionable legality.
And though that graph says "myfico.com" on it, it's not on the website. Is it something that comes with a premium package?

I'm not disputing what you're saying, that going above 15% utilization could have a small impact on one's score, but according to the graph, the impact was neglible across the board, an average of less than 20 points. The OP's score dropped 11.6%, or 86 points, consistent with nearly 100% utilization according to that graph.

No, that's a graph someone posted in a message there.

One thing to take into consideration is the total credit limit. The graph there may be for someone with much higher credit limits and overall credit availability. >50% util on about $1000 of total credit available will ding you pretty hard.

 

[Argo]

Originally posted by: iamwiz82
Sub-question - If you have a lot of revolving debt, but you are paying it off every month, will increasing your limit help? That way the balance is not as big of a percentage?

Yes, although not much.

 

[Argo]

Another thing that some people may not be aware off (at least I wasn't) - laons (car loans, mortgages) affect your score as well. I was surprised when my credit score dropped almost 50 points after I get a 30k car loan.

 

[conjur]

Originally posted by: Argo
Another thing that some people may not be aware off (at least I wasn't) - laons (car loans, mortgages) affect your score as well. I was surprised when my credit score dropped almost 50 points after I get a 30k car loan.

It'll come up steadily as you pay on it, though.

Mortgages will help your score, too.