Score Dropped 60 Points from paying off loan

I had two college loans. Nelnet - 40,000 and KeyBank - 30,000 (Default) Had a family member Pledge money into a loan for myself and I paid back Nelnet for the full amount and settled with KeyBank for 70% (around 20,000) Two months later I ran another report and my score dropped from 672 (Started at 400 from five years ago) and dropped down to 612. No way my wife and I can get a house. I knew it could drop but not 60 points! It's going to take another year to bring it back up to the 670-680 range that I really needed to make a mortgage work. My tracking the last 2 years had been great. Each score was going up each 3 months and we've put a lot into savings and everything has been great. Very depressing to hold my family back like this. I also knew I would be applying for a mortgage at this time so about 6 months ago I opened my first credit card (Capital One QuickSilver -$2,000 limit) SO I have made weekly payments (I emotionally feel better making weekly payments for some reason) and wonder if asking to increase my limit would help or hurt my score. Thanks everyone.

MrE wrote:
I had two college loans. Nelnet - 40,000 and KeyBank - 30,000 (Default) Had a family member Pledge money into a loan for myself and I paid back Nelnet for the full amount and settled with KeyBank for 70% (around 20,000) Two months later I ran another report and my score dropped from 672 (Started at 400 from five years ago) and dropped down to 612. No way my wife and I can get a house. I knew it could drop but not 60 points! It's going to take another year to bring it back up to the 670-680 range that I really needed to make a mortgage work. My tracking the last 2 years had been great. Each score was going up each 3 months and we've put a lot into savings and everything has been great. Very depressing to hold my family back like this. I also knew I would be applying for a mortgage at this time so about 6 months ago I opened my first credit card (Capital One QuickSilver -$2,000 limit) SO I have made weekly payments (I emotionally feel better making weekly payments for some reason) and wonder if asking to increase my limit would help or hurt my score. Thanks everyone. Increasing your limit will not effect your scores either way, unless the card is carrying a large balance - then it will help. First off - your revolving credit is thin with only one CC. Second - do you have any other installment loans? The drop is most likely from the defaulted loan updating and not having any installment loans. That's temporary and your scores will recover as that item ages now. Your issues are easily fixable. First step is to get a second Capital One card. You should get an immediate boost from a second card. A third card from another lender would be good as well. Maybe Discover. If you have no other installment lines, open an account with SDFCU and do a share secured loan with them for $500 @ 36 months. That will also boost your scores. If you have trouble getting a third card, you can get a secured card from SDFCU as well. Three revolving lines will force your scores up much faster than just one. If your last two years are clean, you could easily hit 680 in 3-6 months. After you get the multiple revolving accounts going, to peak your scores you want to only allow one of the cards to report a small balance of less than 10% of its limit.

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HYPASS33 wrote:
Ok so I have about 70,000 in CC debt and I am about to pay off 50,000 of this debt this week but would like some insight on the best way to do so that will increase credit score. Should I pay off highest cards and still have about 11 cards all under 3000 or pay down cards to get debt ratio say under 20% on all cards? I kinda want to pay off all high balances which will knock out about 12 cards but will still leave some other cards with high utilization. Hopefully I will pay off other 20,000 in next year to get out of debt. Give me your thoughts...Good plan for the pay down. My own balances are down from $116k in 2009. With May and June payments this year, I crossed what I think are two major scoring levels:Total revolving balances went below 20% overall utilization on active/reporting cards (other closed cards and hidden Diners are not in this calculation)At the same time, the last of several individual accounts went just below 50%. Said another way, after mid-June, no individual revolving accounts were over 50% utilization. In June, as these were all coming together, my scores jumped up over a 4-week period:May 31: EQ=714 TU=727 EX=731July 8: EQ=756 TU=775 EX=765 So my recommendation is to try for that:No individual balances over 50% utilizationOverall utilization below 20%. Good luck!

Pay off car or wait till Cards produce Credit score?

Hi all,
First let me thank the forum for all it has to offer. I have been a long time lurker so it's my time to post
I had 2 cards with 3 and 2k via credit union and capitalone. Applied may 29th for Costco TE amex getting 5k, while AAoA took a hit I figured I would make temp use of my 707 CS and also applied for quicksilver getting 3k.
So.. I have one personal loan of 1400 down from 3k on 102 monthly from 2014 and a car loan of 4800 down from 15th on a 305 monthly from 2013.
Question is, should I pay off car now (vacation in August so just a means to save $) which also drops insurance by approx $50, or pay it down to approx 3800 and leave 3 months of payments on it ?
Reason being is I'm thinking I could ask for increases on both of these new cards in about 3 months to boost the CL of all my cards overall within the year with systematic increases on my original 2 to catch up to the new amex/cap1. And I'm GUESSING that my car loan still being factored into my credit 3 months from now would be a good thing rather than paying it off and dropping my score, hence lowering whatever CLI I may have had if I left my car on my CR.
Is this thinking correct?
Until 3 years ago I have been plagued with low CL on my cards so now that my score is healthy - now probably in the 680s with recent hard pulls - I can win new cards with respectable limits and grow from there as a solid baseline (I have till 2 or 3 years ago been hit with "too many cards with low CL" so I am thinking I would benefit with a base of solid 3 - 5k cards I can increase over time. Prolly won't buy a house for another 2 years so I figure by then I'll have some great scores.
I have no plans for future large purchases. I have a car and 2 motos so now toys or nonsense on the horizon other than throwing my current wife a surprise bday party in july. My only long term goal is in April of 2016 when Costco ditches the amex which will be bought by Citibank (no approval or reapp just straight conversion) I want to apply for another amen card to always have an amex to grow with.
Thoughts? Please tell me if this is a good idea or if paying car down doesn't matter to begin with.
I can pay my car off this month but I thought I would split the balances on 2 new cards and then pay off approx 10 days after cut statements but before due date to show use and then PIF with liquid balance on hand which I could pay car off with even without new cards.
Thank you so much for any help.

I would like to add also as I am following my updates on myfico. I just traded in my car. Today i got notification of an update and went in to see that is now reporting a zero balance and my score dropped today 19 points. That car loan payoff was the only change. So yes I can attest to the fact that paying off the car loan dropped my score. My new loan has yet to report so idk what'll happen at that time.

I paid down a card to zero and my score dropped 18 points

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tufa4311 wrote:
Bostonia wrote:
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Credit Score Drop & Credit Limit Increase.

This morning I had 7 points drop from my credit score. This past month I decided to pay off a 10 year student loan early thinking it would help my credit score. I know it has helped my financial situation but has given my credit score a hit. I am thinking I got the hit because I closed the account out which significantly lowered my AAOA. I have a auto loan that I am currently paying off and the loan ends in about 2 years. Ive been going back and forth about paying off this also, but since I got the hit I just decided not to and just wait the 2 years. In my report I have 1 missed payment waiting to fall off next month, and after that I am pretty set. I have been also itching for another credit card. At the moment I only have one card which is my Barclaycard. What are your thoughts on opening up another one? I know it'll drop my score but I am thinking that I need to replace my loan with something beneficial such as another credit card. I am just not sure if that is a good thing. This morning I checked my Barclaycard statement and realized that they increased my credit limit. I started off with $1000 and they gave me a credit limit of $3500. So my question is how will this affect my credit score? I am on the road of rebuilding my credit. I started this road in the low 500's and within a few months I was able to get my score up to the low 700's with the help of this forum and advice. I would hate to see myself go backwards again. Any advice would be great.

hazeboo wrote:
This morning I had 7 points drop from my credit score. This past month I decided to pay off a 10 year student loan early thinking it would help my credit score. I know it has helped my financial situation but has given my credit score a hit. I am thinking I got the hit because I closed the account out which significantly lowered my AAOA. I have a auto loan that I am currently paying off and the loan ends in about 2 years. Ive been going back and forth about paying off this also, but since I got the hit I just decided not to and just wait the 2 years. In my report I have 1 missed payment waiting to fall off next month, and after that I am pretty set. I have been also itching for another credit card. At the moment I only have one card which is my Barclaycard. What are your thoughts on opening up another one? I know it'll drop my score but I am thinking that I need to replace my loan with something beneficial such as another credit card. I am just not sure if that is a good thing. This morning I checked my Barclaycard statement and realized that they increased my credit limit. I started off with $1000 and they gave me a credit limit of $3500. So my question is how will this affect my credit score? I am on the road of rebuilding my credit. I started this road in the low 500's and within a few months I was able to get my score up to the low 700's with the help of this forum and advice. I would hate to see myself go backwards again. Any advice would be great. Your AAOA doesnt get affected, it will still count towards your AAOA for 10 yrs from the time of closing.The credit line increase will not hurt your credit scores. If youre going to apply for another CC, i would wait until your CR repoets $0 balance/account closeed/paid as agreed. If you're score went down for paying the school loan off, it should go back up soon...doesnt make sense. When i got my two auto increases with Barclay, they HP me...maybe it changed but i would check and make sure they didnt do that. If they did, i would dispute that you didnt give them permission for auto HP increase. Worked with my wife. Anyonre?

Balance dropped, score dropped. FICO scores a mystery.

They only reason to pay for the service of credit monitoring here on myFICO is so you have some idea of where you stand when you apply for any type of credit or loan. All the information about understanding FICO scoring is all cookie cutter garbage that you can read on any other "credit monitoring" service. And the people that work for myFICO have no idea what they are talking about either. They just repeat the same cookie cutter garbage I was just mentioning. I really hope they are providing their "services" for free, because if they receive any kind of compensation, it is undeserved. My statement balance on my American Express Everyday card went from $50 to $0 and my scores dropped by 11, 12, and 17 points (Equifax, TransUnion and Experian.) I brought the statement balance back up to $50 the VERY next month. Did my scores recover the lost points I just lost a month ago? No. And I am sure all these "credit experts" will say, "something else in your report must have changed." That is code for, "I have no idea what happened, I am just as clueless as you why your score changed the way it did." The precise formula for generating your FICO score is a well guarded secret. It is the same formula used in determining battle damage to your characters in the old Sega Master System game Phantasy Star. Sometimes when attacked, your character would lose 6 health points, other times 80 health points, and even other times 3/4ths of your total health, and so on and so on. This is how FICO scoring works. The formula basically goes, OOGA BOOGA, OOGA BOOGA, this is your updated score. The only advice on this site (again which you can find on EVERY other credit monitoring service) that is worth anything is what responsible credit habits you should be practicing. Other than that, just hope for the best. Your score is a mystery, and it always will be.

Beavakos wrote:
What difference does it make if there are any negatives on my report? I lost points for doing something negative, which is bringing my balance to zero, than returning it back to its previous balance. THAT IS ALL I DID. I thought time heals all wounds when it comes to credit. Any credit missteps I might have had taken should be corrected with time. I really don't know how to make this any clearer. Nothing in my report changed except TIME. If I have two dollars in my bank account, and spend one dollar, then deposit one dollar, I should have now have TWO dollars AGAIN. ?????????????????I understand what Beavakos is saying here and we all get it. Most of us love analyzing data which is why we are here after we've already cleaned up our reports and greatly increased our scores. Again, I understand how Beavakos feels - it is said time and again that UTIL has no memory and what is lost due to UTIL will be regained - well, not always true. Looking strictly at the data two things changed on Beavakos' report: 30 days were added to age and UTIL went from something above 0% to 0%, then back again and yet Beavakos' score did not fully recoup the loss. The reason for this, I think, is very clear - we do not know as much as we think we know about FICO or any other scoring algorithm. If I lost 10 points for going from 5% UTIL down to 0% UTIL but then gained those 5 points back by raising my UTIL to 5% again then scoring algorithm's are not as complicated as they are made out to be and are thus not worth paying for. The previous scenario is simple math and if indeed it was only that I should be able to retest that hypothesis time and again and get the same exact results - not happening. That said, I do not believe that scoring is a crap shoot or something only a witch doctor can understand. It is a complicated mathematical equation that has 100's, if not 1000's, of factors all having a different weight at a different time and I believe there is no one that can determine with 100% accuracy the effect any one factor, forget about multiple factors, will have on your score. Not even the people who wrote the code would know as no one person wrote the whole code. We should probably stop getting so frustrated with how our scores react to the different changes in our reports. The reason we get upset is that we think this is some simple black and white game and it's not. It is very complicated and we will never know what we want to know to the accuracy level we want to know it. What's important is we know what hurts our score to a high degree and what helps our score to a high degree. Take care of all those things we know about and your score will go up; don't take care of those things and your score will go down. After that it is just a game we play to see how we can get to 800...

Best to pay off credit card all at once or slowly over time?

My urrent FICO score is ~730. I just received a bonus and I want to pay off my sole (CitiBank) credit card with a significant balance. Should I pay it off all at once or would it be better to pay it off slowly over an extended period?

It really doesn't matter. If they're going to balance chase you they're going to balance chase you. You're not doing yourself any favors by keeping your utilization higher for a longer period of time. Short term high utilization generally isn't an issue but prolonged high utilization can lead to adverse action. richmcnutt wrote:
My urrent FICO score is ~730.Keep in mind that there are 3 CRA's and many FICO models. For a given model you probably have 3 scores (aside from the ones that are CRA-specific). For a given CRA you have multiple FICO's. The score that matters is whatever score (and CRA) the creditor pulls for you. See also the Understanding FICO Scoring subforum and its stickies. CreditGuyInDixie wrote:
There are a number of other things you can do to improve your score (long term). For example, in the long game you need more than one credit card. FICO views a profile with only one card as "thin."This. Lower utilization is generally better as long as you don't have all 0 balances reporting. Fewer balances are generally better. That's why the recommendation to only allow one balance to report at 10% or less (or $2 according to CB) is suggested for those looking to eke out every possible point when applying for new credit.

Score dropped 100pts. Why?

First off, it is my score from Mint so I am well aware that is a FAKO. Previously my Mint score was a 798 and now it is showing as a 697. I can’t remember the last time I saw a score under 700 so FAKO or not, I am alarmed. What’s even more confusing is that my profile has had little change in the past 3 months (time since last score update). According to the very same Mint page, I have 0 missed payments, 0 derogs, 1 inquiry (had 2 with the 798) and no new accounts in the past 6 months (had 1 new account in the past 3 months at 798) My AAoA is obviously up. I have $39,000 in total limits, which is up from the last update (SP CLI), but I rarely let more than $40 in total post. So what gives? Why does a better profile (inq fell off, AAoA increase) result in a score 100 points lower? Can I chalk it up to the fact that it is a FAKO score? My Credit Karma shows no change. Ideas? Should I be alarmed?

pleiades wrote:
First off, it is my score from Mint so I am well aware that is a FAKO. Previously my Mint score was a 798 and now it is showing as a 697. I can’t remember the last time I saw a score under 700 so FAKO or not, I am alarmed. What’s even more confusing is that my profile has had little change in the past 3 months (time since last score update). According to the very same Mint page, I have 0 missed payments, 0 derogs, 1 inquiry (had 2 with the 798) and no new accounts in the past 6 months (had 1 new account in the past 3 months at 798) My AAoA is obviously up. I have $39,000 in total limits, which is up from the last update (SP CLI), but I rarely let more than $40 in total post. So what gives? Why does a better profile (inq fell off, AAoA increase) result in a score 100 points lower? Can I chalk it up to the fact that it is a FAKO score? My Credit Karma shows no change. Ideas? Should I be alarmed?I wouldn't be alarmed just yet. First of all, there has to be a reason for the huge drop. You would be the best person to answer that. Any collection that might have just showed up ? Any newly closed accounts ? Any newly opened accounts ? Any credit limit decreases ? Something has to have triggered it. First thing I would do is pull of 3 of your bureaus and see what has changed. Only than you will be able to see what has transpired. Good luck and Keep us posted !!

Help! "Fixed" credit issues and score dropped today!

For some reason, my score dropped 13 points today. There's 5 alerts on MyFico -- but I just had a $16,000 CO deleted. I can't imagine that would make my score drop. I mistakenly paid all my CCs down to 0 before knowing this wasn't good. My disputes haven't been removed yet. LVNV promised me 3x they would remove from my CR and the alert said it's still there! I called them and they claimed they haven't reported it this month. A couple other old COs are there so I can't think why on earth it would drop 13 pts. I'm in a very tight window for FHA. I'm fine but I can't fall at all and thought my score would bump up a little.a) what can I do quickly to bump up my score just a little?b) what can I do to run a small balance on one of my CCs (because I learned 0 is bad) when it won't update until the end of the month?c) what do you do when these CA say they're going to delete several times (it's almost falling off) and they don't? We are going to underwriting soon, in August, and I'll be so upset if all my efforst resulted in a 13 pt drop. To me, it makes no sense. When a mortgage co pulled a hard inquiry it jumped 11 pts last week! !!? Advice appreciated!

You might be able to put a small amount on one of your credit cards and call them and as for them to report now, and not wait for the normal cycle. I'm not sure which cards are more likely to do it than others. I know I've read on these boards examples of people doing that.

Score Dropped 60 Points from paying off loan

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