Credit Score 200 point drop

[thegreenman]

I took out a small loan today and found out my credit score dropped by about 200 points, I was like WTF. I checked www.annualcreditreport.com and no negative hits at all, another WTF, I am never late making payments. The only thing I found is a couple of credit cards I have recently went over 30 percent with some larger purchases and I read online credit agencies are using this as a potential red flag. Looks like I will be better off paying down credit cards over the 30 percent threshold with lower interest than regular loans.

Does anyone know if the credit card 30 percent threshold is really that big of a hit on the credit score?

[Fastguy]

Something else is going on. What was the last time you checked it?

[RedLS1GTO]

Debt to income ratio is a big factor... but not sure it is 200 points big.

[thegreenman]

Something else is going on. What was the last time you checked it?

2009, last time I bought a new car.


Debt to income ratio is a big factor... but not sure it is 200 points big.

This might be an issue, the past two months I have made a few large purchases on credit card that I am now just getting the bills for, I am thinking this is causing the hit. Timing suks, I am thinking of selling the house and moving out of state.

Numbers still better than most but not close to what I am use to having. I have never had to worry about it in the past as I normally pay off the credit cards when the bills are due.

[Omega Man]

You need to investigate that. Even if you were perfect you just dropped to shitty credit level.

Try to only use credit when can get 0%. If you can't get 0%, then save and pay cash.

[Fastguy]

Debt to income doesn't come in to play. Your income is not part of the credit scoring. The thing to keep in mind is that there are several models and they vary wildly. Most lenders use Fair Isaac/FICO scores. If they are giving you a TruCredit or Vantage score, that's like comparing celcius to fahrenheit.

[...Whitepower...]

Debt to income doesn't come in to play. Your income is not part of the credit scoring. The thing to keep in mind is that there are several models and they vary wildly. Most lenders use Fair Isaac/FICO scores. If they are giving you a TruCredit or Vantage score, that's like comparing celcius to fahrenheit.

Beat me to it. Creditors have no clue what kind of money you are bringing in so the debt ratio is a nonfactor.

Did you just pull one bureau? You should pull a trimerge and see what the other agencies are reporting as well.

[thegreenman]

You need to investigate that. Even if you were perfect you just dropped to shitty credit level.

Try to only use credit when can get 0%. If you can't get 0%, then save and pay cash.


My number is still above average but shitty from what I am use to having. I like to use 0% credit cards and have always paid off well before the deadline but these cards are over the 30 percent threshold when I transferred (which I just did). Each month I make the payment required to pay off the full amount before the contract date.


Debt to income doesn't come in to play. Your income is not part of the credit scoring. The thing to keep in mind is that there are several models and they vary wildly. Most lenders use Fair Isaac/FICO scores. If they are giving you a TruCredit or Vantage score, that's like comparing celcius to fahrenheit.

I am wondering because I used some lower limit credit cards for some large purchases if they are making for a bad hit on my score.

The bank gave me a low to high scores they were given and I was pissed about the low number, I checked the big three agencies and found zero negative reports. I have no idea who might be reporting a low score on me, I am assuming now only because of my couple of credit cards that just went over 30 percent is negatively affecting me.

[thegreenman]

Beat me to it. Creditors have no clue what kind of money you are bringing in so the debt ratio is a nonfactor.

Did you just pull one bureau? You should pull a trimerge and see what the other agencies are reporting as well.

I did the big three and had zero negative items on all three.

[thegreenman]

I use to pay off credit cards in full each month but had three car payments and was dumping money to the car loans instead of paying off the credit cards due to the lower interest. Now I am down to one car loan, I am wondering if that hurt my score for some reason.

[thegreenman]

One of the questions I had for the bank today was if I was better off using the bank for signature loans than using the credit cards for large purchases, I didn't really get an answer. Does anyone know?

[Fastguy]

One of the questions I had for the bank today was if I was better off using the bank for signature loans than using the credit cards for large purchases, I didn't really get an answer. Does anyone know?

If by signature loan, you mean a loan guaranteed by your own funds, it depends on whether they report to the credit agencies or not. It is considered secured funds which will reflect better than unsecured like a credit card. Once the cards go over 50% of their limit, it impacts the scores negatively. If you go over your limit, its severely impacts the scores.
Do you have a copy of your credit report?

[oyealiz]

It's all a game, and alot of the "rules" make little to no sense.

Why, for instance, is over 30% of a maximum limit a "bad" thing?

I have one credit card that I virtually never use. When we bought our home, though, I put tons on it, then paid it off very soon after. I'd be ticked to find out my credit score took a hit from that, but by their "rules", I suppose it very well may have. Craziness!!!

[polarbear]

Debt to income doesn't come in to play. Your income is not part of the credit scoring. The thing to keep in mind is that there are several models and they vary wildly. Most lenders use Fair Isaac/FICO scores. If they are giving you a TruCredit or Vantage score, that's like comparing celcius to fahrenheit.
:iagree:

[Munch]

Maybe they found out about your new SC? Dead men pay no bills.

Where are you thinking of moving to?

[thegreenman]

If by signature loan, you mean a loan guaranteed by your own funds, it depends on whether they report to the credit agencies or not. It is considered secured funds which will reflect better than unsecured like a credit card. Once the cards go over 50% of their limit, it impacts the scores negatively. If you go over your limit, its severely impacts the scores.
Do you have a copy of your credit report?

That is a big hit then. I just id a transfer using a 15 months no interest so I don't pay any interest and pay it off before due date. I do this when I am paying down my car loans, had three down to one remaining. Looks like it is better to have a car loan than no interest credit card.

I have a free copy of my credit reports, not one negative comment on any of the reports.

[thegreenman]

It's all a game, and alot of the "rules" make little to no sense.

Why, for instance, is over 30% of a maximum limit a "bad" thing?

I have one credit card that I virtually never use. When we bought our home, though, I put tons on it, then paid it off very soon after. I'd be ticked to find out my credit score took a hit from that, but by their "rules", I suppose it very well may have. Craziness!!!

Bank loan officer told me 30% on credit cards is a hit on our score now, my credit reports also mention the same thing. I won't be above 30% long, I guess I will have to wait and see what happens.

[thegreenman]

Maybe they found out about your new SC? Dead men pay no bills.

Where are you thinking of moving to?

:lol:

The SC purchase didn't help. The loan officer did ask me what a Super Charger was?????

I am considering Denver, possibly other locations depending on circumstances. With the temporary score I have I will probably rent until my score gets back to normal, I was surprised it dropped so much.

[thegreenman]

Thanks to everyone for your help. I think I just need to pay off my credit cards before my last car loan and my score should recover.

[Taurus]

Bank loan officer told me 30% on credit cards is a hit on our score now, my credit reports also mention the same thing. I won't be above 30% long, I guess I will have to wait and see what happens.

It's frustrating, you take almost the same hit for NOT having credit card balances at all. I have not used a credit card in 10 years and it lowered my score as well, nothing like you're talking about but still made me look like more of a risk. I am told that the risk is I can go out and open lines of credit after the fact, seems a little unfair to me, but what do I know.

[thegreenman]

It's frustrating, you take almost the same hit for NOT having credit card balances at all. I have not used a credit card in 10 years and it lowered my score as well, nothing like you're talking about but still made me look like more of a risk. I am told that the risk is I can go out and open lines of credit after the fact, seems a little unfair to me, but what do I know.

I heard the rules changed a lot after the housing crisis and I think it seems a little screwy that we get punished for using or not using credit cards. Last time I had a credit check, my credit cards were being paid in full each month.

[Fastguy]

That is a big hit then. I just id a transfer using a 15 months no interest so I don't pay any interest and pay it off before due date. I do this when I am paying down my car loans, had three down to one remaining. Looks like it is better to have a car loan than no interest credit card.

I have a free copy of my credit reports, not one negative comment on any of the reports.

There are things that are smart in real life but bad on credit reports. That scenario is one of them.
You have a recent inquiry, which drops the score, an account with high balance to limit ratio, which drops the score, and an account with little seasoning behind it, which drops the score.

[thegreenman]

There are things that are smart in real life but bad on credit reports. That scenario is one of them.
You have a recent inquiry, which drops the score, an account with high balance to limit ratio, which drops the score, and an account with little seasoning behind it, which drops the score.

That is the realization I came to last night, no problem I can rectify this issue with a little time now that I understand better how this works, thanks for the info.