57 point credit score drop - yikes!

[calmloki]

Credit Sesame just sent word my Transunion score dropped 57 points.

zero late or missed payments
over 9 year credit history
one hard inquiry back in march of 2021
poor account mix (credit cards only, no other debt - our homes and cars are all paid for)
****13% credit utilization****

This still keeps my score over 770, but it was sure impressive to see what changing our normal 1-2% credit utilization did to my score. I'd paid a $26k+ flood damage bill with a $40k limit joint card and my date of payment was just after the card company set our monthly amount due, so I was amused to float that big atypical chunk to the next payment date. This won't affect us, but the gal was not real happy to see her score drop. Went ahead and paid the bill off on the off chance the other credit reporting companies pull a day or two later. A salutary lesson on the effect of credit utilization. Guess I need more credit cards to get my available credit up to reduce my credit utilization. (tongue firmly in cheek)

 

[aja8888]

My 800+ credit score dropped about 50 points when I bought a used car with my credit card ($22,000). It took a year for the score to go back up to where it was before that big charge.

 

[Dtail]

Obviously temporary.
Yes the credit utilization is the most important credit score criteria, along with paying off the minimum required monthly amount.

 

[REWahoo]

This still keeps my score over 770...

I understand your (and her) concern about the big drop, but according to sources like Clark Howard, a score above 760 doesn't really get you anything - other than bragging rights.

“If you can get up to around a 760, you’re going to get the same benefits, the same offers, that someone who has an 840 score is going to get,” says Beverly Harzog, a credit card expert for U.S. News & World Report.

 

[Dalmore]

Pre-covid, we used to use a lot more cash and checks. Now we are putting everything, groceries, bills, dining, etc, on a card. We always pay it off. It is funny how if you use your credit responsibly, your score goes down and if you don't use it at all, your score goes down. The whole credit score business is such a scam.

 

[flyingaway]

My credit scores vary around 800 from time to time, but I don't see much effect from that in retirement. I apply for a new credit card occasionally if they send me some invitation, but that is it.

 

[statsman]

It is funny how if you use your credit responsibly, your score goes down and if you don't use it at all, your score goes down. The whole credit score business is such a scam.

Sounds like investing in bond funds vs the stock markets for the past year+. Doesn't seem to matter what the stock markets do, the bond funds lose value.

 

[yhoomajor]

Unless you plan to take out a huge loan (think mortgage) in next 3-4 months, a temporary drop in Credit score means NOTHING. ZERO effects.

I have a drawer full of credit cards (plastic cards) that I opened and then closed after collecting the bonus points. Drawer literally has 70+ cards in it. I have slowed down on this path (Any bonus point offer of less than $400 doesn't excite me anymore).

Whenever I opened an account, my score would drop by around 10. And then move back up in next 3 months or so.

Same with Barclays card. They keep offering me 0% balance transfer offer for 15 months (3% fee). I used it to buy I-Bonds . card has $46K limit. Score went down.. but its back up now mostly.

I used to be paranoid about my credit score (as if its some holy number). Not anymore. Let the credit score work for you. Rather than you working for the credit score.

 

[rodi]

I expect mine to drop. I put our solar panel install on the credit card last week. I paid it off 2 days later - but I wanted the cashback savings. LOL.

Not planning on buying anything big - so no big deal to me.

 

[Irishgirlyc58]

I stopped looking at mine. It drops when you buy something and goes back up.
I got a new credit card for the incentive points and they provided my credit score which was much higher than credit karma or similar sites show.
Remember when we didn’t get this continuous credit score information? I don’t want things that shut down but I’ve decided as long as I’m paying everything and not really going into debt I don’t need to worry.

 

[sengsational]

Unless you plan to take out a huge loan (think mortgage) in next 3-4 months, a temporary drop in Credit score means NOTHING. ZERO effects.

I'm not so sure about that. Although they claim not to use the "FICO credit score", insurance companies look at your credit files and either award you their best rate, or something less than their best rate. My score is usually high 700's or higher, but over the last few decades, I've had a note in my annual insurance renewal that said they were not giving me the best rate because of something they found on my credit report. Usually this was associated with me playing the credit card signup bonus game, and it was totally worth it because the "hit" to the price of insurance was maybe $50 and I was getting free airline tickets, $1,000 signup bonuses, etc. But the point is, maybe not zero effects.

 

[Jerry1]

. . .The whole credit score business is such a scam.

Exactly how I feel. Me and DW have been married for over 40 years. I was 20 when we got married. Since then, we have never ever been late on a payment. Never. We pay off our credit cards every month except for one (literally one) time. We’ve never held a car loan or mortgage to term (paid off early). We’re still with the same bank (credit union) as we were when we got married.

Yet, we do not have the highest credit rating. I’m pretty sure it’s in the 800’s but why it wouldn’t be at the highest is beyond me (us). I guess whatever method they use doesn’t give full credit for always paying off our debt. But, isn’t that what it’s meant to “score”? Garbage, as far as I’m concerned.

 

[Sunset]

I expect mine to drop. I put our solar panel install on the credit card last week. I paid it off 2 days later - but I wanted the cashback savings. LOL.

Not planning on buying anything big - so no big deal to me.

Chances are your score won't take a hit, as I think they only look at the utilization once per statement period.

At least that is how it seemed to me.
I would pay off my CC every 2 weeks and my utilization must have been low, as my score went up when I changed to paying off after the statement so they could see I used my CC.

Let us know as it's a good test.

 

[brett]

No idea whatsoever on how they calculate a credit score. I see mine every time I log into my C1 account.

It has fluctuated between 830 and 838 ages. I have no idea why it went to 830 a month ago and now it is at 832. Don't really care either other than how it impacts are home and auto insurance premium.

 

[FANOFJESUS]

Try to stay under 30% of the limit. Under 10% is even better.

 

[Dtail]

Chances are your score won't take a hit, as I think they only look at the utilization once per statement period.

At least that is how it seemed to me.
I would pay off my CC every 2 weeks and my utilization must have been low, as my score went up when I changed to paying off after the statement so they could see I used my CC.

Let us know as it's a good test.

I pay off my CC debt each 1st day of the month. I changed my statement date to the 4th of each month. This way typically there is some minor utilization vs. a high utilization or no utilization.

 

[rodi]

Chances are your score won't take a hit, as I think they only look at the utilization once per statement period.

At least that is how it seemed to me.
I would pay off my CC every 2 weeks and my utilization must have been low, as my score went up when I changed to paying off after the statement so they could see I used my CC.

Let us know as it's a good test.

I went and checked. Equifax showed no change... Transunion had a temporary 10 pt drop. But is back up to normal.

 

[Out of Steam]

My credit score hasn't moved by more than 30 points in all the time I've been tracking it.

 

[RetiredHappy]

My credit score goes yo-yo every month because of credit card spending. My spending varies from $6K to $12K a month or more if we bought something for the home. December is also a high spending month because of another $9K on maintenance fees for timeshare. My credit score bounces between 770 to 830 and it does bother us because we don't need to apply for credit or a loan. My husband's steady because he doesn't use his own credit cards. He uses supplemental cards under my account.

 

[CoolRich59]

I stopped looking at mine. It drops when you buy something and goes back up.

Yep. I don’t remember the last time I checked my score.

 

[Badger]

Pre-covid, we used to use a lot more cash and checks. Now we are putting everything, groceries, bills, dining, etc, on a card. We always pay it off. It is funny how if you use your credit responsibly, your score goes down and if you don't use it at all, your score goes down. The whole credit score business is such a scam.

+1 I still use checks for the lawn service, the cleaning service, and IRS, cash if we eat outside at a restaurant, and CC (I have 2 that I pay off every month) for the rest. Everything is paid at the time of service or purchase.

I don't really care about credit score since we can cover all expenses indefinitely without having to use credit. We froze our credit a number of years ago. Not worried.


Cheers!

 

[athena53]

I'm not so sure about that. Although they claim not to use the "FICO credit score", insurance companies look at your credit files and either award you their best rate, or something less than their best rate.

I'd forgotten that- I don't know if all states allow it. There's a clear correlation between credit score and the likelihood of filing a claim but last I knew, some states prohibited this as a rating variable because there was no clear causal link or because low-income people tended to be more affected.

Other than the possible effect on my insurance I'm in the "I don't care" camp. I pay in full every month so am blissfully ignorant of what interest rate my cards charge. I'm almost 7 years into a 15-year mortgage and the balance is so low ($65K) no bank would refinance it. I subscribe to one of the freebie services and get reports from Citibank and the only recent drop worth noticing was a couple of months age when I charged about 50% of my credit limit- major dental work and a down payment on replacement windows. It's back up again.

I still like the monitoring since a big drop might indicate someone has stolen my identity and is taking out accounts in my name.

 

[The Cosmic Avenger]

Pre-covid, we used to use a lot more cash and checks. Now we are putting everything, groceries, bills, dining, etc, on a card. We always pay it off. It is funny how if you use your credit responsibly, your score goes down and if you don't use it at all, your score goes down. The whole credit score business is such a scam.

This was almost exactly my experience. I was puzzled but OK with a score in the 780s to the 790s, but thought it was odd that it never went higher, having had zero late payments for decades and zero debt other than credit cards (no more mortgage or auto loans). Well, we had some unexpected expenses and our CC spending just about doubled, and now it's finally in the 810s!

 

[jazz4cash]

The whole credit score business is such a scam.

YUP! Insurance companies and other non-credit applications of credit scores don’t seem legit to me.

I had a similar 60 point drop in one of my scores due to a loan that I never applied for that was posted to my file. It wasn’t fraud and it was canceled when I inquired. Hasn’t shown up on the other bureaus. I don’t really care since I’m not in the market for a loan and even if I was I don’t think it would affect me unless our scores were < 700 or so. SCAM

 

[ExFlyBoy5]

I don't really care about credit score since we can cover all expenses indefinitely without having to use credit. We froze our credit a number of years ago. Not worried.
Cheers!

Keep in mind that freezing credit does NOT stop a credit issuer from granting credit or other entities from entering data into it; the credit freeze only limits access to the file. While this doesn't normally occur, it CAN HAPPEN so it's still wise to keep an eye on your credit (or have a service that will alert you to activity such as new accounts) to make sure scammers haven't opened an account under your name.

I have heard that some folks have been hemmed up who have bought furniture under some deal that doesn't require a credit check...a lease of some sort (probably like a rent to own) and if they have stolen your identity, this could cause a headache.