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FICO Score, the Great Mystery (?)
Old 09-28-2015, 08:05 PM   #1
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FICO Score, the Great Mystery (?)

Just out of curiosity as I don't envision needing credit ever again:
Through my AMEX card I get to see my FICO score for free. Last month it was 830, and this month it went down to 823. The helpful comments gave 2 reasons my score wasn't higher: no current loan activity (no surprise there), and my credit card balances are too high to my credit limits (!!!).
That second one is a shocker, since I pay in full every month. I only use 2 cards, but I have several others I don't use. So my overall credit limits are pretty darned high, and my AMEX monthly balance rarely exceeds $5000.
It just seems this FICO scoring is beyond-quirky. Oh yeah, why the heck did it go down last month??
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Old 09-28-2015, 08:22 PM   #2
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Fair Isaacs works in mysterious ways. My wife once co-signed for the grandson on a pickup truck through GMAC. She had a FICO score of 830. GMAC told the dealer they'd never seen any higher score.

Congratulations on your taking care of your personal obligations in such a prompt manner. That is a strong indication that you're of high character and that you have a strong capacity to pay those obligations.

But I still cannot explain small changes up and down--not that it matters in your case.
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Old 09-28-2015, 08:32 PM   #3
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Originally Posted by mystang52 View Post
....
That second one is a shocker, since I pay in full every month. I only use 2 cards, but I have several others I don't use. So my overall credit limits are pretty darned high, and my AMEX monthly balance rarely exceeds $5000.
....
Was the balance high as a percentage of the limits on either of the cards you use at any time during the month prior to the score? My "experience" (from just looking at it occasionally) is that a high ratio on a single card can get you even it you pay 100% each month. (in my case, the Brooks Bros. friends and family discount had a little, transient negative side affect in that I opened a card line up and they gave me just a few dollars more than the suits I bought.)
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Old 09-28-2015, 09:06 PM   #4
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I check my FICO score every month via my Discover card. It's always in the 790-820 range, but it fluctuates every month. I think it's a matter of when they take the snapshot. If they do it before my payment (in full) posts, my balance/credit line ratio is higher, so the score goes down. If they take it after the payment posts, the score is higher. Nothing to worry about, that's for sure.
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Old 09-28-2015, 09:06 PM   #5
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Originally Posted by mystang52 View Post
Just out of curiosity as I don't envision needing credit ever again:
Through my AMEX card I get to see my FICO score for free. Last month it was 830, and this month it went down to 823. The helpful comments gave 2 reasons my score wasn't higher: no current loan activity (no surprise there), and my credit card balances are too high to my credit limits (!!!).
That second one is a shocker, since I pay in full every month. I only use 2 cards, but I have several others I don't use. So my overall credit limits are pretty darned high, and my AMEX monthly balance rarely exceeds $5000.
It just seems this FICO scoring is beyond-quirky. Oh yeah, why the heck did it go down last month??
FICO scores are based on a snapshot of your credit profile at any point in time. If your total outstanding balance on credit cards is $2,305 on one day, and $2,933 on another day, you could have slightly different scores, because on the other day, you have used up more of your credit availability, and (compared to the $2,305 day), you are slightly more of a credit risk, because you have used up more of your credit.

If someone has maxed out $100,000 in credit cards and has $100,000 in a HELOC oustanding, compared to someone who has zero balances (at that snapshot in time) on their $100,000 in credit cards, which do you think is more of a credit risk? It's the one that has used up more of their available credit (all other things equal).

Therefore, even though you pay off your credit cards in full each month, credit scorers don't know what the future holds, and there's nothing to say that you are guaranteed to pay off your balances in full next month instead of the minimum balance, or even default.

Granted, your credit history paints a good picture of you, and given everything else, you are not likely to default (which is why you have a high credit score)...but they plug various stats and variables about your credit balances into their equations, and out comes a relative score for your creditworthiness at that point in time.
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Old 09-28-2015, 09:23 PM   #6
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Originally Posted by mystang52 View Post
Just out of curiosity as I don't envision needing credit ever again:
Through my AMEX card I get to see my FICO score fccredit card balances are too highedit card balances are too highr free. Last month it was 830, and this month it went down to 823. The helpful comments gave 2 reasons my score wasn't higher: no current loan activity (no surprise there), and my credit card balances are too high to my credit limits (!!!).
That second one is a shocker, since I pay in full every month. I only use 2 cards, but I have several others I don't use. So my overall credit limits are pretty darned high, and my AMEX monthly balance rarely exceeds $5000.
It just seems this FICO scoring is beyond-quirky. Oh yeah, why the heck did it go down last month??
One thing comes to mind. what's your limit on the AMEX card? If it's less than17K then you are using more than 30% of that card. Hence the "balance is too high to your limit" comment. It's best to keep balances on any one card below 30%.
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Old 09-28-2015, 09:29 PM   #7
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One thing comes to mind. what's your limit on the AMEX card? If it's less than17K then you are using more than 30% of that card. Hence the "balance is too high to your limit" comment. It's best to keep balances on any one card below 30%.
+1. I just concentrate all my bills, groceries and purchases on 1-2 cards so my credit utilization for a single card can easily go to 50+%. Going forward, I plan to pay for outstanding charges weekly so as not to run afoul of the 30% rule (might need to apply for mortgage in 2-3 years). Another option is to request for a higher credit limit.
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Old 09-28-2015, 09:32 PM   #8
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Honest to goodness, didn't know my credit limit on my AMEX so just checked: $25,000. So I almost never exceed 20%. Like I said in my original post, in the end it doesn't really matter.
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Old 09-28-2015, 09:42 PM   #9
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+1. I just concentrate all my bills, groceries and purchases on 1-2 cards so my credit utilization for a single card can easily go to 50+%. Going forward, I plan to pay for outstanding charges weekly so as not to run afoul of the 30% rule (might need to apply for mortgage in 2-3 years). Another option is to request for a higher credit limit.
I think you are over thinking this. If you have multiple cards and only go over 30% on one, it's not going to significantly effect your FICO score. Unless you are teetering on the edge of an Excellent/Good/Mediocre score it really won't matter. Heck, if it's that important just pay the card in full each week just before you apply for the mortgage. But I think it's a waste of time, really.

As far as requesting a higher credit limit, I have been trying for years, but as an ER with a small income they wouldn't do it. But just this year I've gotten a higher limit on 3 different cards. So I think they are loosening up the requirements, finally.
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Old 09-28-2015, 10:49 PM   #10
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I have seen mine go down when I charge up a CC... when you buy airline tickets for Europe, hotels, etc. etc. and add it on to the charges for health and home insurance the outstanding balance gets pretty high and the score drops..

I have been as low as 780 recently... due to the above and the new loan for the car... now is back to above 800 and moving up...


When I first got married and we went shopping for furniture, the salesman took our info to get a loan... he said it would take a bit of time.. he walked back and said we were approved... said he had not seen anybody approved so fast... I think I was in the 830+ range then... see what getting married can do to your score
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Old 09-29-2015, 12:59 AM   #11
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I think you are over thinking this. If you have multiple cards and only go over 30% on one, it's not going to significantly effect your FICO score. Unless you are teetering on the edge of an Excellent/Good/Mediocre score it really won't matter. Heck, if it's that important just pay the card in full each week just before you apply for the mortgage. But I think it's a waste of time, really.
My FICO score is on the edge of Good/Mediocre (hovering between 680-720). Overall credit utilization is around 5-10% but the 2 cards I use most can sometimes go up to 70-80% of credit limit when I have big bills bunched together. That has apparently brought my score down despite always paying the balance in full so it'll probably take some careful nursing to get it up to Excellent

Funnily enough, my credit score was higher back when I had an outstanding $20K auto loan. Alas, I'm not really interested in getting another auto loan.
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Old 09-29-2015, 04:46 AM   #12
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Mine dropped from 840 to 800 in slow increments after paying off the mortgage.

So there's another argument against paying off the mortgage. It ruins your score!

(Of course we also applied for multiple "rewards" cards during the last 2 years, so there's that. "Too many accounts held for too short a time.")

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Old 09-29-2015, 09:45 AM   #13
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When I paid off the mortgage on the house in Texas, I took an immediate 40 point hit. It took about 6 months for it to recover to the 800+ range. As for the score fluctuating, mine varies from 810-825'ish. It depends on whether I catch my Amex (really only card I use) and pay it before the statement closing date. If I do that, then my total balances will be about $20 (or less) with $155,000 available credit. Those months, the score will be 820+. If I pay it AFTER the statement closes (last example being $1800 reported), the score dropped to 812. So even though the utilization was below 1.5%, the score "took a hit."

The bottom line is there is no REAL figuring out the FICO score. This doesn't even take into account how many different models are out there depending on the credit you seek.
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Old 09-29-2015, 09:53 AM   #14
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FICO scores are based on a snapshot of your credit profile at any point in time. If your total outstanding balance on credit cards is $2,305 on one day, and $2,933 on another day, you could have slightly different scores, because on the other day, you have used up more of your credit availability, and (compared to the $2,305 day), you are slightly more of a credit risk, because you have used up more of your credit.

If someone has maxed out $100,000 in credit cards and has $100,000 in a HELOC oustanding, compared to someone who has zero balances (at that snapshot in time) on their $100,000 in credit cards, which do you think is more of a credit risk? It's the one that has used up more of their available credit (all other things equal).

Therefore, even though you pay off your credit cards in full each month, credit scorers don't know what the future holds, and there's nothing to say that you are guaranteed to pay off your balances in full next month instead of the minimum balance, or even default.

Granted, your credit history paints a good picture of you, and given everything else, you are not likely to default (which is why you have a high credit score)...but they plug various stats and variables about your credit balances into their equations, and out comes a relative score for your creditworthiness at that point in time.
+1 We also pay off our credit cards monthly - that doesn't matter: what matters is how much credit you've used at the point in time the snapshot is made.

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Old 09-29-2015, 10:49 AM   #15
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Originally Posted by mystang52 View Post
Just out of curiosity as I don't envision needing credit ever again:
Like you, I don't ever envision needing credit again. Other than credit cards that I pay in full each month, I haven't financed anything in more than 20 years and I think I can easily do that again for the next 30+ years. (like if I could live that long)

I've never checked my credit score. Maybe I'm missing something? So my question is, in a case like mine, and I suspect like many others on this board, why would I care about my credit score?
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Old 09-29-2015, 11:26 AM   #16
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I don't plan on opening new debt accounts - but I do plan on staying insured. Your credit score is a factor in pricing many insurance products. I get a "good credit discount" on my homeowners and umbrella policies.
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Old 09-29-2015, 12:40 PM   #17
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Your credit score is a factor in pricing many insurance products. I get a "good credit discount" on my homeowners and umbrella policies.
It must not apply to medical insurance (if so my credit score must be terrible) However, I have noticed that my car insurance and umbrella polices are lower now than they have been in the past few years. Homeowners is about the same.
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Old 09-29-2015, 12:54 PM   #18
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Like you, I don't ever envision needing credit again. Other than credit cards that I pay in full each month, I haven't financed anything in more than 20 years and I think I can easily do that again for the next 30+ years. (like if I could live that long)

I've never checked my credit score. Maybe I'm missing something? So my question is, in a case like mine, and I suspect like many others on this board, why would I care about my credit score?

Someone also said about insurance, but from what I understand it is used for other business decisions....

Not checking your score does not mean it is bad... heck, before a few years ago you only found out your score if you were getting credit and asked.... it was a big secret....

I would bet with your lifestyle etc. that yours would be pretty high....
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Old 09-29-2015, 05:18 PM   #19
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DW and my scores are often different by several points (think the last was 827 for me and 815 for her.) Weird because I can't think of anything different other than that I have a few $K in an account in my name at my old CU. All of our credit is in both names. We have separate retirement accounts, of course, but I didn't think that was a factor. In any case, sometimes she is higher and sometimes I am. From that, I figure the algorithms they use to calculate scores are pretty bizarre and "unknowable."

We did get into the "% of available credit used" thing when we applied for a mortgage - not that it mattered. We were well above 800 at the time (815/816?). The mortgage rep. told us a trick we could "play" if we wanted to bump our scores. Send the CC Co. an extra amount toward the next months payment. IOW, keep the balance 0 or less. We didn't try it, but I'm guessing it would work - but who cares.

We found out that FICO score is pretty much useless past a certain point (mid to high 700s and beyond is pretty much the same thing - namely, EXCELLENT!) BUT, even with a high FICO, you aren't a shoe-in for a loan. At the time of our mortgage, more important was income. Being retired can be a real detriment to EARNED income since many of us live off of our stash. BUT, since the IRS counts much of your withdrawals (say, from a 401(k) or tIRA) as INCOME, all you have to do is show your IRS income (from 1040) and the bank is happy. Worked for us. BUT you poor folks who live off of already taxed money could be in for a shock if you every go for a mortgage. Just a word to the wise. Maybe it's different now that things have loosened up again. As always, YMMV.
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Old 09-29-2015, 08:36 PM   #20
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Now that Discover lets me see mine I've noticed it also changes in seemingly counter-intuitive ways. It had been 780ish for a considerable period of time but this summer it jumped above 820 and when I just went to check it is now at 850. These upward jumps coincide with large charges that just got added to a CC account. A +40 point jump when $8000 of AC installation went on in July and another +30 when significant travel hit the card last month. It must be that I was "underutilizing" my credit before July since the jumps occurred BEFORE I paid off these amounts.
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