My credit score dropped 20 points this week because...

[Ali Gator]

On 6/12/2024 at 11:05 PM, BenjaminNicholas said:

It's all a part of the FICO game.  Just wait a bit (45-60 days), it'll rebound.

Ultimately, if you don't have a healthy mix of different kinds of credit, one or two closures will drastically affect you.

Also, know the difference between what a charge vs credit card does for your open credit statistics. 

Good luck!

You were right.

It's been 90 days, and sure enough - my credit score has rebounded almost to the point it was before on CreditKarma.  I say 'almost' because I did lease a new car in August (and returned the one I had because the lease expired), and that slightly hit my credit score (the lease amount is just under $30K). 

[+ PhileasFogg]

6 hours ago, BenjaminNicholas said:

If you have assets on paper that are somehow verifiable, you can easily get a car loan/lease.  Same with a home.

Yeah…but then, with interest rates where they are, why borrow?   I just need to earn 6% and spend 4% to double my estate to my grandkids in 30 yrs.  If rates are over 6, I wouldn’t borrow.   If they were close, I wouldn’t borrow.  If they were really low, I might.  Plus, borrowing gives the illusion of “affording” more…plus, I would never give some car dealer insight into my wealth.  

I just find it odd that my recurring income goes to zero and my score hits the max six months later. 

[+ BenjaminNicholas]

13 hours ago, PhileasFogg said:

Yeah…but then, with interest rates where they are, why borrow? 

But this has nothing to do with the point of why I replied.

The strawman strikes again!

 

[+ BenjaminNicholas]

18 hours ago, MikeThomas said:

I just don’t get all the anxiety over fluctuations in credit scores.  The ones we can see aren’t even the ones the banks use to make lending decisions.

If you can get access to your FICO 8 and 9, you will be able to keep up with what about 90% of lenders use.

That and Vantage, which is a little more difficult to access.

[+ Vegas_Millennial]

14 hours ago, PhileasFogg said:

I just find it odd that my recurring income goes to zero and my score hits the max six months later. 

Income is not a factor in credit history or credit scores.  A high credit score is not an indicator of good financial habits.  It is only an indication of managing debt well.  Someone with good financial habits who saved and invested consistently, and managed to save to pay cash for all expenses including transportation and even a house (it's not unheard of to save to buy a 2 bedroom house in rural or suburban areas with cash in your mid-20s), will be financially better off than 99% of other people yet possibly have a low or even no credit score.

 

Edited September 18, 2024 by Vegas_Millennial

[MikeThomas]

Some fun reading…

FICO Score 8 and Why There Are Multiple Versions of FICO Scores| myFICO

WWW.MYFICO.COM

---

FICO Score versions include both model updates and industry-specific FICO Scores. At myFICO, we offer the FICO Score versions that most lenders use to...

 

[+ BenjaminNicholas]

3 hours ago, MikeThomas said:

Some fun reading…

FICO Score 8 and Why There Are Multiple Versions of FICO Scores| myFICO

WWW.MYFICO.COM

---

FICO Score versions include both model updates and industry-specific FICO Scores. At myFICO, we offer the FICO Score versions that most lenders use to...

 

I really find the credit bureau system to be fascinating. 

They've always been cloaked in a little bit of secrecy, but if you take the time to know their specific rules, you can use them to your advantage.  I've cleaned up many a friends credit reports using letters and time-specific punting.

That said, I'd prefer to see them more regulated, as they have nearly unchecked power within the system.

[Rudynate]

On 6/12/2024 at 6:33 PM, Ali Gator said:

I've always had a credit score in the 800s, 'excellent credit'. I pay everything on time, more than the minimum, and keep by balances pretty low. Today I checked my credit score with two companies reporting, and my score dropped 20 points to 'very good' through no fault of my own.  What was the reason ?

 

After 40 years of having a credit history with JC Penney, they closed my account this week. (I opened the card when I was in college, as a college professor told everyone to open at least a Sears card and JC Penney card - at the time, they were the only two 'national stores' which had locations in just about every state, so if we were traveling for business and our luggage was lost, we could at least buy clothes at a mall nearby, which probably had a Sears or JCP. Plus, Sears had an automotive shop back then in the mid-80s. Pretty sound advice.)  I haven't used my JC Penney card in about a decade, because JCP closed their 'underperforming' store in my area, which was a few minutes from my home. The closest one to me is about thirty minutes away - there's nothing in JCP that would lure me to drive thirty minutes.  So forty years of excellent credit history has been wiped out thanks to JCP.

Six years ago, my credit score was hit when Nordstrom - which I had a credit history with for 20 years - closed their only store in my state. Twenty years of excellent credit history was wiped away with them. When I called and complained, they said that they closed my account because I only shopped their store in my state, never shopped on-line with them, and never shopped in any of their stores in other nearby states. So they believed I was done as a customer, since I proved to be a 'one location brick and mortar' shopper. Great. (Same thing happened to my aunt back then).

 

As for Sears, they closed my account when they closed all their stores in my area about fifteen years ago -can't recall if it hit my credit score as hard back then. But it was about 25 years of excellent history wiped out.

Your credit will probably be back up to 800+ in a few months, so I wouldn't fret.  OTOH, you can dispute the credit report.

[misterhumphries]

On 7/20/2024 at 4:49 PM, BenjaminNicholas said:

To be fair, you didn't utilize your credit line for what was likely years.  That's on you.

You can't just get open credit and keep it at $0.  That's not the way the game works.

And stop using Credit Karma.  It's often wrong and isn't giving you an accurate picture of your real score.  

MyFICO is direct from the sources, all variations of FICO. 

Game is right.  Witness  how our friend Ali Gator is beating his breast over a fluctuation involving something he has no control over.

We have been brainwashed to believe a "high" FICO score somehow makes you a better consumer, a better person, and more entitled to special treatment. 

I favor Dave Ramsey's perspective that an individual in a truly strong financial position doesn't rely on the vagaries of a credit score. He delays gratification -- in most cases -- and pays CASH for what he wants whenever possible.

[+ BenjaminNicholas]

4 hours ago, misterhumphries said:

I favor Dave Ramsey's perspective that an individual in a truly strong financial position doesn't rely on the vagaries of a credit score. He delays gratification -- in most cases -- and pays CASH for what he wants whenever possible.

Ramsey, to me, is mostly a cult of personality.  His history with promoting and profiting from timeshare bullshit is something he handled like a shithead and would forever make me listen to anyone else for financial advice.

That said, I wouldn't take advice from anyone on television who's yelling at people.  Not my thing.

FICO serves a purpose because most people aren't in a cash-rich situation.  They don't have immediate access to millions and need to power of banks to finance big purchases.  

 

 

[+ FrankR]

6 hours ago, BenjaminNicholas said:

Ramsey, to me, is mostly a cult of personality.  His history with promoting and profiting from timeshare bullshit is something he handled like a shithead and would forever make me listen to anyone else for financial advice.

That said, I wouldn't take advice from anyone on television who's yelling at people.  Not my thing.

FICO serves a purpose because most people aren't in a cash-rich situation.  They don't have immediate access to millions and need to power of banks to finance big purchases.  

 

 

i agree - Dave Ramsey had some good ideas about budgeting and saving for a rainy day, but that is pretty much where the value stops. To listen to him about credit or investing is a mistake. His rants are a bridge too far. FICO is a little like baseball - learn the game and play it with patience. 

[Buddy15]

Because I had not used a credit card for a few years the bank lowered my credit limit from $20K to $5K. My FICO score took a small hit, going from 830 to 825 so I didn't think much of it.  Then I got a letter from the bank telling me I could request an increase in my credit limit online if I wanted to go back to the original limit.  I went online and within 5 seconds they restored the original limit.  I guess they just wanted to find out if I'm still alive!

[+ PhileasFogg]

On 9/28/2024 at 8:06 PM, misterhumphries said:

Game is right.  Witness  how our friend Ali Gator is beating his breast over a fluctuation involving something he has no control over.

We have been brainwashed to believe a "high" FICO score somehow makes you a better consumer, a better person, and more entitled to special treatment. 

I favor Dave Ramsey's perspective that an individual in a truly strong financial position doesn't rely on the vagaries of a credit score. He delays gratification -- in most cases -- and pays CASH for what he wants whenever possible.

You are right.  It manifested itself for me in recent weeks when my score hit 850 on all three bureaus.  Then, I had an unused card show up with a $99 annual fee (it was an airline points card that perhaps I gave to my exwife to isolate her purchases years ago when we were divorcing).  
First thought: cancel the card it’s an unnecessary expense

Second thought: no, that will hurt my 850 scores

Reality is that it might have impacted my score, but only for a short time. 

[SoCalBaseball]

It is still excellent!! You should be proud. Good game 🙌

[misterhumphries]

23 hours ago, Buddy15 said:

Because I had not used a credit card for a few years the bank lowered my credit limit from $20K to $5K. My FICO score took a small hit, going from 830 to 825 so I didn't think much of it.  Then I got a letter from the bank telling me I could request an increase in my credit limit online if I wanted to go back to the original limit.  I went online and within 5 seconds they restored the original limit.  I guess they just wanted to find out if I'm still alive!

Gamesmanship! Your bank did you the "favor" of being possibly $20K in debt instead of $5K. 

It's a thing that makes you go "Hmmmmm...."

One of my credit card providers lowered my credit limit -- for reasons only they know -- and I thank them. The resulting limit is all I need for practical purposes; the rest is financial window dressing, possible quicksand.