Credit score…dropping

April 7, 2012 at 6:45 am (credit score)

My credit score has been dropping in the last year, and it just dropped again. You’d think that my decision to pay off my debt would be a good indication of credit worthiness, but apparently not! The credit bureaus have their own criteria, which I am obviously not meeting.

I recently closed one of my 2 US Bank cards. It had a $0 balance, and they sent a note that they were about to charge me an annual fee. Screw that! I got the card because of a zero interest rate offer. Used it, paid it off, and never looked back. I don’t need a gazillion credit cards, so when I got that letter in February, I opted to close the account. My credit utilization how now increased (bad), the number of credit cards I have available has decreased (bad), and the length of time my credit has been opened has only partially been affected (slightly, ever so slightly good).

The other big reason I’m being dinged is because I had a hard credit inquiry. I just bought a $999 road bike (plus taxes, plus 2 service plans, plus cheap pedals, plus a cage for my water bottle). I opted to go with free financing for 6 months, with GE Capital, for just over $1100. Be able to pay it off in 6 months without having to effectively slow down my debt payments? Fabulous! Not having to pay interest charges by putting it on a credit card and then not pay it off immediatley? Even better! Having decreased the average age of my credit cards by a chunk, oh well. Having a hard credit inquiry (meaning I am about to use credit and am a bigger credit risk since I don’t have enough to pay my bills…), oh well. It was still a good decision, but according to TransUnion, not in the short run!

It will get better eventually. In the meantime, here’s a list of my credit fluctuations that I’ve gotten off of CreditKarma:
April 2010 – 794
Sept. 2010 – 787
Dec. 2010 – 788
May 2011 – 779
March 2012 – 779
April 2012 – 772

I have seen my credit fall from 794 two years ago to 772, a whopping 22 points. In that time I have closed a credit card of over 18 years (FU Citibank!), and I began paying down debt. I opened a few zero percent cards (US Bank/Discover), and opened an REI card for the awesome rewards (since I shop at REI frequently!). I have always been fully up-to-date on all my payments. Yet, I am supposedly 97% less credit worthy than 2 years ago.

Go figure.

debtmaven out.

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