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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Disasterous change to my credit score looming!

September 8, 2010 at 8:07 am (credit cards, credit score, Uncategorized)

A credit score is partially based on how many cards you have, the credit to debt utilization, and the averge length of credit card history. For many years, I had only a Citibank card (for 18 years 8 months!). I just recently closed it. It has not yet been reported to the credit agency that Credit Karma uses (which is TransUnion), which is the way I check my credit score, so I’m waiting for the ax to fall and see how poorly that will impact my rating.

A few months ago, I had 3 credit cards and my score was 794. Since then, I opened 2 new cards (see my previous post on that subject for why), which dropped my score to 787 (6 points). Last month I closed Citibank which will result in my stats becoming a fiery burning wreck.

Let’s see what will happen:

Number of Cards: 5 (pre-Citibank closure) – 4 (post-Citibank closure)
Average years open:  5 (pre-Citibank closure) – 1 (post-Citibank closure)
Avail Credit: $41,500 (pre-Citibank closure) – $25,500 (post-Citibank closure)
Debt to Credit Ratio: 6% (pre-Citibank closure)9% (post-Citibank closure)
Credit Score:  787 (pre-Citibank closure) – PENDING (post-Citibank closure)

It will be interesting to see how these changes will affect my credit score. What’s your guess? I think it will drop into the 760s.

I now have:
Citibank (no more! Closed Aug, 2010!!!!)
Discover (leftover from a 0% transfer offer)
US Bank (non-REI, leftover from a 0% transfer offer)
BECU (low 6.9% rate)
US Bank REI (high rates, awesome paybacks, will pay in full every month).

Ugh. Big ugh. Unavoidable, and I kinda don’t care, but still!

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More details about CreditKarma & recent changes to my credit score

February 27, 2010 at 9:31 am (credit score)

I got my updated credit score from creditkarma today and have started to notice some specific issues with the speed of changes that get reported. Now I am not sure if the problem lies with creditkarma (CK) itself, or if it’s based on how slowly things are reported to TransUnion, the site that it gets them from. Here are a few observations:

  • I joined a credit union in mid-January. It wasn’t until after February 1st that it was reported as opened (the last time I checked my credit).
  • My credit card/debt balance is comprised of only 2 debts and is missing 1 big one. The US Bank balance and the Wells Fargo personal line of credit are both reported. My SBA loan is completely missing. I wonder if it is because this is a business loan?
  • My debt balance is out of date. The US Bank balance is listing as over $6K – it hasn’t been that high since before December, 2008. I wonder if US Bank isn’t reporting it since I am not using it for any transactions whatsoever? Wells Fargo is reporting much more quickly. It shows at $999 balance, which indicates that they reported the total debt within the last 2 weeks. I will need to keep checking back to see how long before that debt shows up as $0 – that will indicate how quickly WF updates and/or how quickly TransUnion shows changes.
  • I get an “F” for having so little accounts open (7 open, 1 closed). Apparently, to have the best score, I should have more like 40+ (that’s what they indicate as having the best result on your credit score). Sorry, not going to open 30 or more credit cards!!!!!!
  • Having a new account opened had 2 effects that I can determine: it reduced the average age of my available credit, since this new one is a newborn (bad) and increased the available credit available (good). Overall, the new account caused my credit score to go from 794 to 790, a drop of 4 points.

I will post more on this subject as I find it out – I am fascinated to be able to tell changes in my score from specific and measurable occurrences (it must be the scientist leanings in me).

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