How is it possible that my credit score dropped?
I cant understand how in the world my credit score actually fell lower than it was last month. No late payments in the past 4 years, no new credit inquiries or accounts since May (the same inquiries were on last months report), and I actually paid off a $4000 credit card. This makes no sense to me whatsoever....Can anyone explain why my score dropped?
Public Comments
- Is it only slightly or is there a huge difference? Slight fluctuations are nothing to worry about, it will probably revert back next month by which time the £4000 you paid off should have registered. If there is a big drop check with the Credit reference agencies such as Equifax or Experian (on line or with a form). It could indicate that someone has applied for or borrowed in your name. Another possibility is that someone at the same address as you has financial problems. Once you have checked your credit records you can have them sorted if anything is incorrect, if it someone else at the same address you can 'disassociate' yourself financially from them. Check the websites for Experian & Equifax for fuller details.
- Paying off a credit card may have been the triggering mechanism. While you have reduced your person debt and monthly payments, the decidely unfair, injust and all powerful credit community saw this as a reduction to your credit borrowing limits. No it is not fair and yes it is pretty stupid but it is what we deserve for allowing the establishment of an oligopoly to control private credit ratings. Do we want a change? DO we want more government control? Outside of Fannie Mae and Freddie Mac have you seen successful and intelligent government overseen credit management . [WHOOPS- I FORGOT THIS WEEKS NEWS] If you have Libertarian feelings you are limited to the hands-off existing system. If you have traditional Republican/Democratic feelings you are looking to competition between special interests, business lobbyist whores (former retired legislators) and corporate greed to be looking out for your interests. Some choice! Good Luck
- Understanding Your Credit Score: http://www.gmigllc.com/credit/90013.php Check the section 'What factors affect your credit score?' in the lower section of the site. Sometimes a change of score happens with a slight delay, so even if you made a payment, the report hasn't been updated right away. Happened to me one time and that's how the credit card company explained it, but Experian did not confirm (neither denied) it.
- They were supposed to change the scoring systems last month a little bit. If you are an authorized user on someone else's account, that person's good credit will no longer count towards your score. I believe they were also changing the way things were weighted and the credit utilization ration was going to be more heavily considered. In this formula, any card that was carrying a balance of 50% or more of its limit would hurt you more than in the past. Did any of your credit limits drop? I've read some articles that indicated creditors were suddenly dropping the limits on lines of credit and credit cards which can mess up your utilization ratio. Other than that, who knows? The credit scoring agencies never reveal the exact methods they use for reaching your score......just the general ratios and measures.
- There are any number of possible explanations... You might have had an inquiry that you can't see on your consumer-based credit report or monitoring service yet... Third party debt collectors may have made a "hard" inquiry into your credit... Did you CLOSE the credit card you paid off? Or was it perhaps a collection/charged-off account? Are a joint holder of any accounts that might've affected you somehow... Authorized user accounts shouldn't even appear on your credit, let alone impact your score, but co/joint owner accounts will... Did you pull the exact same type of report from exactly the same company..? Many companies have various versions of the credit scoring models to choose from, and the disparity could be traced back to something as simple as having two different models used to pull the same person's score... Typically, a MyFico report is one of the most accurate, as it comes directly from Fair Isaac Corp., the company who writes the formulas for all three bureaus. You can find these products at either of these two sites... http://www.bestcredityet.com/creditreports.html http://www.creditgecko.com/creditreports.html If you find that you need help rectifying any inaccuracies on your credit reports after you pull them, you might try these guys... http://www.omegacreditrepair.com I hope this helps!
- make inquiries with the credit burea
- You score will fluctuate a little up and down without much rhyme or reason. Mine dropped a lot when I paid for a car I bought in just six months. The reporting agency had it listed at "Repossessed" when I made the final payment. Arghh!! It took me forever trying to fix the problem, finally I paid http://www.ovationIaw.com to do it. Very frustrating! Hope your problem is something more simple. What a pain in the butt that was.
