Scores dropped by 120+ when utilization increased

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daveinla
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Scores dropped by 120+ when utilization increased

Postby daveinla » Sat Jan 16, 2016 11:13 am

I keep my credit utilization in the 3-4% range. My CK and CS scores have been in the high-700s for a long time, but I recently made a very large purchase that maxed out my BofA Visa ($32K) that increased my total utilization to 14%. I typically pay off large balances before statement close so I can keep utilization low, but I wasn't able to do that so far. Statement closed a few days ago and now my CK/CS is in the mid-600s, which is the lowest I've ever seen (dropped 120+). The due date isn't until February and I'll be able to pay off the entire balance in a couple days. How long after I do that will the scores return to where they were before?


kdm31091
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Re: Scores dropped by 120+ when utilization increased

Postby kdm31091 » Sat Jan 16, 2016 11:32 am

Utilization score changes will correct themselves the next time each card reports (typically each month after the statement). Don't worry about it. It's short term damage that will not impact you in the long term.

daveinla
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Re: Scores dropped by 120+ when utilization increased

Postby daveinla » Sat Jan 16, 2016 1:49 pm

kdm31091 wrote:Utilization score changes will correct themselves the next time each card reports (typically each month after the statement). Don't worry about it. It's short term damage that will not impact you in the long term.


Assuming CK/CS reflects my real FICO, I should expect it to go back to its previous score next month when BofA statement closes? It'll happen immediately (ex 120 pt jump) or will it go up gradually over a few months?

Tubpbs
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Re: Scores dropped by 120+ when utilization increased

Postby Tubpbs » Sat Jan 16, 2016 3:57 pm

daveinla wrote:
kdm31091 wrote:Utilization score changes will correct themselves the next time each card reports (typically each month after the statement). Don't worry about it. It's short term damage that will not impact you in the long term.


Assuming CK/CS reflects my real FICO, I should expect it to go back to its previous score next month when BofA statement closes? It'll happen immediately (ex 120 pt jump) or will it go up gradually over a few months?


It should theoretically go right back to where it was. That probably won't happen. Probably a little lower or higher than before but in the same range within probably 0-12 points or so is my guess.
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Nixon
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Re: Scores dropped by 120+ when utilization increased

Postby Nixon » Sun Jan 17, 2016 3:54 am

CK CS scores are about as accurate as a newborn with a sack of wet marbles.
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Vattené
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Re: Scores dropped by 120+ when utilization increased

Postby Vattené » Mon Jan 18, 2016 11:39 am

Nixon wrote:CK CS scores are about as accurate as a newborn with a sack of wet marbles.

Yeah...for what it's worth, anecdotally I don't actively manage my utilization and my CK scores tend to be swayed more by utilization changes than my FICOs. As mentioned, utilization is a "snapshot in time" measurement and won't have a lasting impact. Also, individual as well as overall utilization matters, so the fact that one card got maxed out may have a lot to do with that dramatic change.

In short, there's no need to worry about it.
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ingramjuan
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Re: Scores dropped by 120+ when utilization increased

Postby ingramjuan » Mon Jan 18, 2016 11:29 pm

daveinla wrote:I keep my credit utilization in the 3-4% range. My CK and CS scores have been in the high-700s for a long time, but I recently made a very large purchase that maxed out my BofA Visa ($32K) that increased my total utilization to 14%. score (dropped 120+).



Very surprised your score dropped 120 points. I wonder what else happened within your credit file? and or what else was factored into the large decrease?
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takeshi
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Re: Scores dropped by 120+ when utilization increased

Postby takeshi » Tue Jan 19, 2016 9:10 am

daveinla wrote:My CK and CS scores

Do you have creditors that actually use VantageScores?

daveinla wrote:How long after I do that will the scores return to where they were before?

Your revolving utilization is determined based on balances and limits as indicated in your reports. Your scores will recover when your reports update with lowered revolving utilization.

daveinla wrote:Assuming CK/CS reflects my real FICO

It does not. You cannot use a score generated by one model to determine a score generated by another model. That's regardless of FICO or FAKO. Even FICO has a number of different scoring models used by creditors so you cannot use one FICO to determine another FICO.

You don't have one "true" FICO. You need to consider relevance of the specific model and CRA to a given creditor. If, for example, a creditor uses a TU FICO 4 then your EX FICO 8 is irrelevant. Any score that is not a TU FICO 4 is irrelevant. If you want to know your TU FICO 4 then you have to pull that score.

daveinla wrote:It'll happen immediately (ex 120 pt jump) or will it go up gradually over a few months?

Your score will adjust as is appropriate for the data in the report. Revolving utilization has a significant impact but it is not the only factor that matters. The specific number of points depends on all the data changes. We have no idea if you'll recover 120 points but if your revolving utilization recovers the scoring model will factor it in when the score is generated.

Nixon wrote:CK CS scores are about as accurate as a newborn with a sack of wet marbles.

All scores are accurate but only for their own model. Accuracy is not about how well a scoring model mimics another model despite how many misuse the word. VantageScores are not designed to mimic a FICO model.

VantageScores are used by some creditors and are certainly relevant to those creditors. However, they are not relevant to creditors that do not use them. The same applies to any scoring model which is why it's relevance that matters and not accurate, real, fake, reliable or whatever other adjectives people tend to use.



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