Credit Score Question

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills.
Post Reply
Topic Author
SeekingAPlan
Posts: 216
Joined: Sat Dec 12, 2015 12:03 pm

Credit Score Question

Post by SeekingAPlan »

Today I was shocked to discover that my credit score dropped from 820 last month to 780 this month. I am wondering what could cause this and if I should be worried about identity theft or anything like that.

I have no mortgage or debt & have lived in the same spot for half a century so no credit checks or anything like that. Just have 4 long standing credit accounts (30+years). I pay them all off each month and have less than 1% utilization. This has not changed.

The only difference that I know of is that I had a relatively recent (opened 2013) store credit card with a low limit of $2000 which I never used & it got closed this month. The store went into bankruptcy and is closing all outlets. My account was closed "at credit grantor request" for this reason. It represented a tiny fraction of my available credit. Could this cause such a large drop in my credit score?

I went to the annual credit report site but it will not let me get a report. After asking a few questions about loans which I do not have it says I have to mail in several items and try to get a report mailed to me. This has never happened before either but I have read about it here at Bogleheads so I do not think this is a reason to be even more worried.

Does anyone have any thoughts on why my score would drop?
mhalley
Posts: 10432
Joined: Tue Nov 20, 2007 5:02 am

Re: Credit Score Question

Post by mhalley »

Being unable to get your online report is concerning, but it happens sometimes. I would be concerned but not alarmed at this point. I would go ahead and get them via snail mail. I wouldn’t think a small cc closing would cause such a drop. A 40 point drop is not that much, but seems a little too much for a normal fluctuation. It could be an error rather than fraud.
Have you frozen your credit? Once your credit is frozen, then you don’t have to worry as much about something happening with ID theft.
I seem to recall Clark Howard talking about fico changing their formula on a recent podcast, so that could be it. They apparently adjust their formulas regularly.
This blog posts says 20 points is normal but 40 a concern.
http://blog.credit.com/2014/03/how-much ... nth-77530/
Topic Author
SeekingAPlan
Posts: 216
Joined: Sat Dec 12, 2015 12:03 pm

Re: Credit Score Question

Post by SeekingAPlan »

Thank you for the reply.

I think the reason I am alarmed about this one is that I also got a letter this week from a former employer that said they had a breach of their systems a few months ago and all employee/former employee info was stolen along with data on dependents and beneficiaries. Hopefully the two things are not related.
User avatar
dm200
Posts: 23214
Joined: Mon Feb 26, 2007 1:21 pm
Location: Washington DC area

Re: Credit Score Question

Post by dm200 »

I wonder (don't know) if the algorithm(s) for the credit score you are looking at may have changed. Also, keep in mind that different credit scoring models often have very different scores for the same time and person. You cannot compare different scoring models.
Topic Author
SeekingAPlan
Posts: 216
Joined: Sat Dec 12, 2015 12:03 pm

Re: Credit Score Question

Post by SeekingAPlan »

The same score supplied by my bank has been the same for a very long time. It suddenly took an unexpected 40 point dive this month. As far as I know, the bank has not changed their source. The documentation about how the score is calculated appears to be the same but maybe I suppose they could change the calculation with out changing the high level info they send to customers.
Gadget
Posts: 1026
Joined: Fri Mar 17, 2017 1:38 pm

Re: Credit Score Question

Post by Gadget »

I track my credit scores and report on credit karma. I've seen it swing from 820 to 790 range for no apparent reason other than slight changes in credit card utilization rates. Even though all balances are paid in full every month. I wouldn't worry yet, but I'd also start monitoring your credit report with something like credit karma. Maybe useless since I have my credit frozen, but it makes me feel better.
User avatar
SeeMoe
Posts: 1107
Joined: Sat Jul 18, 2015 11:30 am
Location: Near Philly..

Re: Credit Score Question

Post by SeeMoe »

My bank account pays all of the bills month in and out and has our only credit card which is paid off before any interest charges kick in monthly. All direct deposit pensions go to this account and handles the Vanguard AIP investments. Never have any outstanding bills and keep between $10-$15 on hand at all times, but the credit score fluctuates between 808 and 842 while my wife’s bank account, which never does anything as it’s just a holding account for her, has a steady credit score of between 838 and 842! Why the difference in the two,.. I don’t know and stopped worrying about it long ago.Just happy to have the excellent ratings that wasn’t always the case back in the day, before Vanguard came into our lives.

SeeMoe.. :mrgreen:
"By gnawing through a dike, even a Rat can destroy a nation ." {Edmund Burke}
Topic Author
SeekingAPlan
Posts: 216
Joined: Sat Dec 12, 2015 12:03 pm

Re: Credit Score Question

Post by SeekingAPlan »

Thanks Gadget and SeeMoe.

I will check out Credit Karma. It is good to hear that others have fluctuating scores. Mine occasionally fluctuated very slightly but always in the 800s until now.
dknightd
Posts: 3727
Joined: Wed Mar 07, 2018 10:57 am

Re: Credit Score Question

Post by dknightd »

SeekingAPlan wrote: Sat May 05, 2018 11:30 am Today I was shocked to discover that my credit score dropped from 820 last month to 780 this month. I am wondering what could cause this and if I should be worried about identity theft or anything like that.
That would be a big enough drop to concern me. Pull a credit report and see if there is some activity you do not recognize.
Retired 2019. So far, so good. I want to wake up every morning. But I want to die in my sleep. Just another conundrum. I think the solution might be afternoon naps ;)
User avatar
fortfun
Posts: 3146
Joined: Tue Apr 19, 2016 7:31 pm

Re: Credit Score Question

Post by fortfun »

Nerdwallet offers a free credit report from Transunion. Experian seems to run lower than Transunion. You may have been thinking of your Transunion score but given your Experian score.
Topic Author
SeekingAPlan
Posts: 216
Joined: Sat Dec 12, 2015 12:03 pm

Re: Credit Score Question

Post by SeekingAPlan »

The score that dropped was from TransUnion but I am not due another free TransUnion report for a few months. I was able to access Experian because of another data breach that exposed my information. It only shows the closed dept store credit card and zero balances on my other cards as expected. Soft pull from my internet provider which I do not think would have any effect. Will check out NerdWallet.
dknightd
Posts: 3727
Joined: Wed Mar 07, 2018 10:57 am

Re: Credit Score Question

Post by dknightd »

The score will go up and down. Pull a report if you are concerned.
I think https://www.annualcreditreport.com will give you access to a free one once a year from each vendor.
The "score" can change a bit from month to month. Depending on balances, and changes in scoring rules.
If you are concerned about identity theft, I'd pull one or more right away. The free report will not include a "score", but should let you know if something looks fishy
Retired 2019. So far, so good. I want to wake up every morning. But I want to die in my sleep. Just another conundrum. I think the solution might be afternoon naps ;)
Topic Author
SeekingAPlan
Posts: 216
Joined: Sat Dec 12, 2015 12:03 pm

Re: Credit Score Question

Post by SeekingAPlan »

dknightd wrote: Sat May 05, 2018 7:09 pm The score will go up and down. Pull a report if you are concerned.
I think https://www.annualcreditreport.com will give you access to a free one once a year from each vendor.
The "score" can change a bit from month to month. Depending on balances, and changes in scoring rules.
If you are concerned about identity theft, I'd pull one or more right away. The free report will not include a "score", but should let you know if something looks fishy
This is what lit a fire on my concern. I pull a report every 4 months or so. When I tried to pull the only one currently available for free it would not let me. It asked a few questions for which all the answers were "none of the above" and then said I would have to mail in proof of my identity to get the report. Upon further investigation I see that this outcome is fairly common these days so not really cause for alarm.

I have lost count of all the corporate breeches that have exposed my info. At this point it feels like it is all out there for anyone who wants to steal it.
dknightd
Posts: 3727
Joined: Wed Mar 07, 2018 10:57 am

Re: Credit Score Question

Post by dknightd »

SeekingAPlan wrote: Sat May 05, 2018 7:28 pm

I have lost count of all the corporate breeches that have exposed my info. At this point it feels like it is all out there for anyone who wants to steal it.
My assumption is that everybody knows more about me than I do
Retired 2019. So far, so good. I want to wake up every morning. But I want to die in my sleep. Just another conundrum. I think the solution might be afternoon naps ;)
essbeer
Posts: 220
Joined: Sat May 09, 2015 6:23 pm

Re: Credit Score Question

Post by essbeer »

If your bank is Wells Fargo, they did change both the type of FICO score and the agency this month. At least they did for me. My score went down about 20 points or so.
User avatar
Earl Lemongrab
Posts: 7270
Joined: Tue Jun 10, 2014 1:14 am

Re: Credit Score Question

Post by Earl Lemongrab »

It's really hard to tell. I had a home loan that finished up in November. At that time, my Transunion 8 score as reported by Discover dropped from its previous about 840 to around 815 from that point. The most recent report has these factors:

FICO score 816
14 Total Accounts
31 years Length of Credit
1 Inquiry
1% Revolving Utilization
0 Missed Payments

Now, my Experian 8 score as reported by Amex showed almost no difference. It was around 822 before and after the home loan. Amex doesn't provide as much specific information, just:

Your FICO® Score as of April 14th, 2018: 823

Key Factors affecting your personal FICO® Score on April 14th, 2018

1) Time since most recent account opening is too short
Your FICO® Score considers how recently you opened a new credit account. People who recently opened a new credit account are more likely to miss future payments than those who have not.

2) Lack of recent installment loan information
Your credit report shows no recent non-mortgage loans (such as auto or student loans) or sufficient recent information about your loans. Having a loan along with other types of credit demonstrates that you are able to manage a variety of credit types.
Topic Author
SeekingAPlan
Posts: 216
Joined: Sat Dec 12, 2015 12:03 pm

Re: Credit Score Question

Post by SeekingAPlan »

Thank you for including the factors from your report. I went back and reviewed mine. They normally read very much like yours.

This time there was a small difference. There is a comment that says "No recent non-mortgage balance information". Normally I charge something in any given month. Apparently I did not do so this month as all of my accounts are reporting a $0 balance and nothing due on the monthly bills. I would have thought that would be a good thing but I guess not.
spencer99
Posts: 486
Joined: Thu Apr 01, 2010 5:17 pm

Re: Credit Score Question

Post by spencer99 »

SeekingAPlan wrote: Sat May 05, 2018 11:30 am The only difference that I know of is that I had a relatively recent (opened 2013) store credit card with a low limit of $2000 which I never used & it got closed this month. The store went into bankruptcy and is closing all outlets. My account was closed "at credit grantor request" for this reason.
I'm surprised no one has noted the section highlighted above. The credit rating agency could well consider a credit grantor's rescission of credit as a negative without more information. It might be worth your effort to contact the credit rating agencies to request that they change this notation to "closed at your request." That may not be exactly accurate but give a better sense of your responsibility (or lack thereof) in this.

By the way, I spoke to a friend recently. Same thing happened to him related to credit from a department store in Milwaukee that closed.

Good luck,

S
Topic Author
SeekingAPlan
Posts: 216
Joined: Sat Dec 12, 2015 12:03 pm

Re: Credit Score Question

Post by SeekingAPlan »

spencer99 wrote: Mon May 07, 2018 10:33 am
SeekingAPlan wrote: Sat May 05, 2018 11:30 am The only difference that I know of is that I had a relatively recent (opened 2013) store credit card with a low limit of $2000 which I never used & it got closed this month. The store went into bankruptcy and is closing all outlets. My account was closed "at credit grantor request" for this reason.
I'm surprised no one has noted the section highlighted above. The credit rating agency could well consider a credit grantor's rescission of credit as a negative without more information. It might be worth your effort to contact the credit rating agencies to request that they change this notation to "closed at your request." That may not be exactly accurate but give a better sense of your responsibility (or lack thereof) in this.

By the way, I spoke to a friend recently. Same thing happened to him related to credit from a department store in Milwaukee that closed.

Good luck,

S
Probably the same store.

I actually wondered about the wording on that. Also will be interesting if Sears goes away. My Sears Master Card is my oldest account -- almost 4 decades. I suspect closing that at the grantor's request could cause quite a drop too. I do not use it but have left it open because of the age of the account.
User avatar
Earl Lemongrab
Posts: 7270
Joined: Tue Jun 10, 2014 1:14 am

Re: Credit Score Question

Post by Earl Lemongrab »

spencer99 wrote: Mon May 07, 2018 10:33 am I'm surprised no one has noted the section highlighted above. The credit rating agency could well consider a credit grantor's rescission of credit as a negative without more information.
I don't think so. Credit cards get closed all of the time by the issuer, usually for non-use. I've never seen that on the list of things FICO considers (although their algorithms are not public). Naturally, the usual factors like affect on credit ratio apply regardless of how the card was closed.
Caduceus
Posts: 3527
Joined: Mon Sep 17, 2012 1:47 am

Re: Credit Score Question

Post by Caduceus »

The annual credit report site is very scammy. It won't let me get my free credit reports too, and there's no number to call and no support. I suspect the credit bureaus intentionally gum up the system (they are frequently down and many, many people are unable to get free reports even when the website is up) because if people could get free credit reports, they are much less likely to pay for their scores or their reports. So I would not worry about that. I mean, think about it: would you offer your product for free if you were also offering a paid version of that product on your website?

I will pay good money to bet that this will be the next big scandal that's exposed by investigative journalism - that companies like Equifax and Transunion are playing games to prevent you from accessing your free credit reports. I ended up paying for my FICO scores to find out that they they had confused my addresses (listing an old address as a current one, even though they knew exactly when those addresses were reported to the bureau.) Two years later they said there was a "technical error" on the website. When I asked what the error was, they could not tell me what information I had provided incorrectly.

I bet this is very common. I also bet it might be intentional, since one simple mistake in their database is enough to push users who would otherwise get a free report into paying for it.
Last edited by Caduceus on Mon May 07, 2018 12:10 pm, edited 1 time in total.
User avatar
Earl Lemongrab
Posts: 7270
Joined: Tue Jun 10, 2014 1:14 am

Re: Credit Score Question

Post by Earl Lemongrab »

Caduceus wrote: Mon May 07, 2018 12:04 pm The annual credit report site is very scammy. It won't let me get my free credit reports too, and there's no number to call and no support. I suspect the credit bureaus intentionally gum up the system (they are frequently down and many, many people are unable to get free reports even when the website is up) because if people could get free credit reports, they are much less likely to get their scores or their reports. So I would not worry about that.
That's not been my experience. I have been getting all three since the free program was mandated, and I have had few problems. If you can't get a report online, they have to mail one to you.
takeshi
Posts: 1175
Joined: Thu Oct 03, 2013 10:02 pm

Re: Credit Score Question

Post by takeshi »

SeekingAPlan wrote: Sat May 05, 2018 11:30 am Today I was shocked to discover that my credit score dropped from 820 last month to 780 this month.
If it's a FICO 8 then you're still well above the point where best terms are generally offered. That said, like someone posted above, ~20 points or less is the threshold I'd normally suggest as treating as noise while ~40 points is probably worth looking into.

Make sure you're aware of both the scoring model and the CRA used as a data source for any score you're referring to. Your source should state this info. If not, you can inquire to find out the specifics. Also be aware that you don't have just one credit score. There are many models used by creditors for credit decisions and for most models you have a score with each of the 3 major CRA's. Make sure you're keeping tabs on all 3 CRA's and not just 1.
SeekingAPlan wrote: Sat May 05, 2018 11:30 am The only difference that I know of is that I had a relatively recent (opened 2013) store credit card with a low limit of $2000 which I never used & it got closed this month. The store went into bankruptcy and is closing all outlets. My account was closed "at credit grantor request" for this reason. It represented a tiny fraction of my available credit. Could this cause such a large drop in my credit score?
No -- impact from closure would be due to the impact to your revolving utilization. In other words, losing $2,000 of available revolving credit would have to significantly increase your usual 1% utilization which would be unlikely given that you stated that this card represents a tiny fraction of your available credit.
mhalley wrote: Sat May 05, 2018 12:24 pm I seem to recall Clark Howard talking about fico changing their formula on a recent podcast, so that could be it. They apparently adjust their formulas regularly.
There is FICO 9 but it came out quite some time ago. Additionally, it wouldn't just be a matter of FICO introducing a new scoring model but of the OP's source for the score deciding to switch to the new model -- which is a possibility.
SeekingAPlan wrote: Sat May 05, 2018 11:30 amDoes anyone have any thoughts on why my score would drop?
Could be any of number of things and even all sorts of possible combinations of things. You really have to review reports from before and after the scoring change to determine the cause(s).
fortfun wrote: Sat May 05, 2018 6:47 pm Experian seems to run lower than Transunion.
Higher or lower is going to depend on the specific data in the reports for a given person. It's not simply that one CRA is higher or lower than others. One could be higher for one person and lower for the next. This can also change for a given person over time. I've had one higher that became lower and so on because data in a report can and does change over time.

Also make sure you're looking at the exact same scoring model when comparing. You cannot compare with different models since the evaluate report data differently and can even have different scoring ranges.
SeekingAPlan wrote: Sun May 06, 2018 6:29 pm There is a comment that says "No recent non-mortgage balance information". Normally I charge something in any given month. Apparently I did not do so this month as all of my accounts are reporting a $0 balance and nothing due on the monthly bills. I would have thought that would be a good thing but I guess not.
There is a hit for having all your revolving accounts report $0 balances. When one of your revolving accounts reports a balance you'll recover.
SeekingAPlan wrote: Mon May 07, 2018 10:47 am I suspect closing that at the grantor's request could cause quite a drop too.
The remark is not relevant for scoring. Definitely don't rely on assumption when it comes to credit. There are specifics on how credit is assessed and scored that you definitely want to understand. This is just a starting point -- there's much more to it including a lot of finer points not covered on this page or linked pages.
https://www.myfico.com/credit-education ... dit-score/
SeekingAPlan wrote: Mon May 07, 2018 10:47 am My Sears Master Card is my oldest account -- almost 4 decades. I suspect closing that at the grantor's request could cause quite a drop too. I do not use it but have left it open because of the age of the account.
A closed account also factors into Average Age of Accounts as long as it is on a report. Closed accounts typically remain on reports for 10 years though they sometimes drop off earlier. That said, age of oldest account also plays a role for Length of Credit History.
User avatar
Earl Lemongrab
Posts: 7270
Joined: Tue Jun 10, 2014 1:14 am

Re: Credit Score Question

Post by Earl Lemongrab »

SeekingAPlan wrote: Mon May 07, 2018 10:47 am I actually wondered about the wording on that. Also will be interesting if Sears goes away. My Sears Master Card is my oldest account -- almost 4 decades. I suspect closing that at the grantor's request could cause quite a drop too. I do not use it but have left it open because of the age of the account.
I don't think Sears as a whole will go away for a while. They will keep closing brick and mortar stores and concentrate more online. To make sure the card stays in play, use it once in a while.
Topic Author
SeekingAPlan
Posts: 216
Joined: Sat Dec 12, 2015 12:03 pm

Re: Credit Score Question

Post by SeekingAPlan »

Earl Lemongrab wrote: Mon May 07, 2018 11:19 pm
I don't think Sears as a whole will go away for a while. They will keep closing brick and mortar stores and concentrate more online. To make sure the card stays in play, use it once in a while.
Yes. They send a warning to use it by a certain date or they will close it. Since I don't want it to close I always make sure I do that. Maybe when some of my other accounts are older I will just let it close.
Topic Author
SeekingAPlan
Posts: 216
Joined: Sat Dec 12, 2015 12:03 pm

Re: Credit Score Question

Post by SeekingAPlan »

takeshi wrote: Mon May 07, 2018 10:29 pm
SeekingAPlan wrote: Sat May 05, 2018 11:30 am Today I was shocked to discover that my credit score dropped from 820 last month to 780 this month.
If it's a FICO 8 then you're still well above the point where best terms are generally offered. That said, like someone posted above, ~20 points or less is the threshold I'd normally suggest as treating as noise while ~40 points is probably worth looking into.

SeekingAPlan wrote: Sun May 06, 2018 6:29 pm There is a comment that says "No recent non-mortgage balance information". Normally I charge something in any given month. Apparently I did not do so this month as all of my accounts are reporting a $0 balance and nothing due on the monthly bills. I would have thought that would be a good thing but I guess not.
There is a hit for having all your revolving accounts report $0 balances. When one of your revolving accounts reports a balance you'll recover.
Thank you for the extensive reply.

It is a Trans Union Fico 8 score and nothing seems to have changed in the way it is being calculated, at least as far as I can tell.

Looks like I need to keep an eye on things and see what happens when my balances are not $0.
Post Reply