Discover IT FICO drop?

All about Discover & Diners Club - talk about their credit card deals such as the More, Miles, Escape, and others.
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Korey
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Discover IT FICO drop?

Postby Korey » Mon Jun 09, 2014 5:10 pm

Hi all,

I opened my IT card like maybe a month or two ago. I noticed on my second statement that my FICO score dropped. Is there a reason for this? I do pay the balance off before the payment due date. I also did make a few online purchases maybe $200-$300 worth, and ended up returning it (I am picky with clothes). Could that be it?

It was 734 in may, and now it's like 717???

Thanks guys!


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CarefulBuilder14
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Postby CarefulBuilder14 » Mon Jun 09, 2014 5:46 pm

Do you have a short total credit history?

Discover took about 1.5 months from the time I opened the account to report to TransUnion. Perhaps this new account has lowered your average age of accounts (a component of your FICO score)?

734 to 717 isn't a huge drop.
Wallet: Prestige CSP SchwabPlat Freedom It Hyatt SallieMae AAPlat
SD: Arrival BrooksBros BCE ED IHG
Letting new accounts cool off since May
Really not sure what I'll add next or when

Korey
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Postby Korey » Mon Jun 09, 2014 6:41 pm

CarefulBuilder14 wrote:Do you have a short total credit history?

Discover took about 1.5 months from the time I opened the account to report to TransUnion. Perhaps this new account has lowered your average age of accounts (a component of your FICO score)?

734 to 717 isn't a huge drop.


My cards right now:
Kohls - $-12/$300 (They did some adjusting due to my percent off) 1 yearish
5/3 Secured Master Card - $0/$500 1 yearish

+ new discover

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PlyrStar93
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Postby PlyrStar93 » Mon Jun 09, 2014 6:51 pm

How is your utilization reported to bureaus? Even if you pay off entire balance before due date, utilization reported could still be high; also when having multiple accounts, each account should be kept a low utilization (which means if card A has high utilization while cards B and C have 0 utilization, it's still not good).
Citi Forward Visa $5000 10/2012 | American Express Blue Cash Everyday $8000 2/2014 | Discover it $7000 5/2014
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Korey
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Postby Korey » Mon Jun 09, 2014 7:16 pm

PlyrStar93 wrote:How is your utilization reported to bureaus? Even if you pay off entire balance before due date, utilization reported could still be high; also when having multiple accounts, each account should be kept a low utilization (which means if card A has high utilization while cards B and C have 0 utilization, it's still not good).


makes sense. I usually don't use my kohls charge, but I do on occasion to get my scratch offs/employee discount. what should utilization be on each account?

flan
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Postby flan » Mon Jun 09, 2014 7:49 pm

Korey wrote:My cards right now:
Kohls - $-12/$300 (They did some adjusting due to my percent off) 1 yearish
5/3 Secured Master Card - $0/$500 1 yearish

+ new discover


Twenty points is about right for a new account drop. There are two components to that drop. One is the new account itself. The other is that the average age of accounts drops, and with a short thin file, that's a big drop.

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PlyrStar93
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Postby PlyrStar93 » Mon Jun 09, 2014 11:44 pm

Korey wrote:makes sense. I usually don't use my kohls charge, but I do on occasion to get my scratch offs/employee discount. what should utilization be on each account?


1% utilization usually is most helpful to boosting scores, 10% to 30% is also good, but try not to have a 30%+ utilization on any card reported.

flan wrote:Twenty points is about right for a new account drop. There are two components to that drop. One is the new account itself. The other is that the average age of accounts drops, and with a short thin file, that's a big drop.

I do agree with these factors. Now my concern is I have new account as well, but score dropped from 740 (day got approved, May 16th) to 729 (May 29th). I also have two other accounts and the average age of them is same ~1 year (one around 20 months, the other around 4 months). The OP's score dropped by 17 points but mine only 11.
Citi Forward Visa $5000 10/2012 | American Express Blue Cash Everyday $8000 2/2014 | Discover it $7000 5/2014
Chase Freedom Visa Signature $7000 6/2014 | Citi ThankYou Premier Visa Signature $5000 1/2015
All EMV.

takeshi
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Postby takeshi » Tue Jun 10, 2014 10:55 am

Korey wrote:I noticed on my second statement that my FICO score dropped. Is there a reason for this?

Yup. Scores are based on your reports. Review your TU report and find out what changed. We can't tell you as we have no idea what was on your reports and what's on them now. It may or may not have anything to do with your Discover card.

Korey wrote:I also did make a few online purchases maybe $200-$300 worth, and ended up returning it (I am picky with clothes). Could that be it?

Individual transactions don't matter. Reported utilization (and all the other usual factors) does.

Korey wrote:what should utilization be on each account?

30% max but other than that it's up to you to determine. Some maintain at 10% or less with only balance reporting for optimal scoring but that really isn't necessary unless one is applying for something. I'd recommend focusing on your reports versus the numbers. There's no guarantee that a creditor will use the same FICO model as what Discover provides. A creditor may not even use TU. Both of those can also affect scoring.



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