Credit Score dropped dramatically, nearly 80 points (2024)

Hello, my credit score dropped dramatically, nearly 80 points

Did I get moved into a new bucket?

The negatives:

- One late payment on business credit I co-signed with a business entity, and this is just on a mere $2000 limit

- Over 50% utility on a $2000 limit business credit card

- Over 50% utility on a $25000 limit credit card (CSP in my signature)

The positives:

- Some old inquiries got bumped off

- No new inquiries

- Payments on time

Why I am questioning the dramatic change: My understanding for "credit utility" as being a negative factor was based on ALL of your credit, I have $145,000 in available consumer credit on credit cards, and was using just over 10% of that.

The business credit card has a low limit, has one late payment from that entity and that entity did cover it. Although it does show up on my credit report as being late, this was a known risk and part of the point of guaranteeing that business credit.

Thanks for any insight

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@gen-specific wrote:

Hello, my credit score dropped dramatically, nearly 80 points

Did I get moved into a new bucket?

The negatives:

- One late payment on business credit I co-signed with a business entity, and this is just on a mere $2000 limit

- Over 50% utility on a $2000 limit business credit card

- Over 50% utility on a $25000 limit credit card (CSP in my signature)

The positives:

- Some old inquiries got bumped off

- No new inquiries

- Payments on time

Why I am questioning the dramatic change: My understanding for "credit utility" as being a negative factor was based on ALL of your credit, I have $145,000 in available consumer credit on credit cards, and was using just over 10% of that.

The business credit card has a low limit, has one late payment from that entity and that entity did cover it. Although it does show up on my credit report as being late, this was a known risk and part of the point of guaranteeing that business credit.

Thanks for any insight

FICO will ding you for each card and for your over all UTL. So if you are carrying balances on all or most of your cards, even if they are small, that will ding you. The more accounts you have at 0, the better as long as they aren't ALL at 0. Then they ding you for each account.

If you have any cards showing a balance of 80% or more, that card will score as a "maxed out" card, which will ding you even more.

That late payment is going to hurt you a bit. Can you try to call and or write to them explaining what happened and ask them to please remove it as a gesture of good will?

625 EQ FICO Current Score: 660 DCU EQ FICO/ 645 Scorewatch EQ FICO , EX FICO 664, TU FICO 737 (08/2014)
Goal Score: 700 Seedling again as of 07/29/14

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IME, the overall util scoring is much more significant than individual cards. I just let my Barclays report at over 50% and my FICO didn't move at all. Overall util is the same. I have also noticed that I can let multiple cards report balances and my FICO is the same as if only 1 card had reported a balance, as long as I don't let 50% or more of my credit cards report a balance.... in that case, my FICO will drop.

How long ago was the late payment? If it was just reported, that is the most probable cause of the score drop.

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It's typically the case that business CCs do not report to personal.

But there are some exceptions, and it's worth trying to sort this out, especially in the case of derogatories.

If you have a late payment on a business CC, and the late shows up on personal, then you could take a large hit, especially if your starting scores are relatively high.

As far as utilization goes, it is calculated as a combination of (1) overall, (2) per card, and (3) proportion of cards with balances.

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I was floating 19k on a 25k limit, this is 76%

I was floating 1200 on a 2k limit, this is 60% , and was also another business card for a different entity I was guaranteeing.

None, nothing was over 80%, and most of my cards have a small balance under 10% util or are at 0.

Anyway I've paid off both of those cards, and am now floating much smaller balances on each.

@notfancy wrote:

If you have any cards showing a balance of 80% or more, that card will score as a "maxed out" card, which will ding you even more.

That late payment is going to hurt you a bit. Can you try to call and or write to them explaining what happened and ask them to please remove it as a gesture of good will?

Call who? When I was notified that the business entity was late in paying it back in November it was a collections agency calling me instead of the banking/credit institution. I made sure it got paid just a few minutes after that call.

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@DaveSignal wrote:

IME, the overall util scoring is much more significant than individual cards. I just let my Barclays report at over 50% and my FICO didn't move at all. Overall util is the same. I have also noticed that I can let multiple cards report balances and my FICO is the same as if only 1 card had reported a balance, as long as I don't let 50% or more of my credit cards report a balance.... in that case, my FICO will drop.

How long ago was the late payment? If it was just reported, that is the most probable cause of the score drop.

50% isn't a big deal on a single tradeline; the flag is either 80 or 90% I think, heard differently and I've never gone to test it personally.

FWIW I drop on the of 14 points (peak, may have lost a few for 14% and 27% utilization but those were identical 640-646-640 twice) for a maxxed out tradeline on EQ in whatever sloppy bucket I happen to be in.

@Anonymous late payment date is what I'm interested in too, @OP if that was recent and you had a pretty score otherwise 80 point drop isn't unreasonable. The tradeline it's on doesn't matter, a late on a 25K CSP is the same as a late on a $300 Cap 1 secured.

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@Revelate wrote:

@Anonymous late payment date is what I'm interested in too, @OP if that was recent and you had a pretty score otherwise 80 point drop isn't unreasonable. The tradeline it's on doesn't matter, a late on a 25K CSP is the same as a late on a $300 Cap 1 secured.

Had a pretty *WHAT* score? Can you revisit that thought because I don't understand it

The late payment date is reported as November 2013 in my report. This is the second quarterly credit report that I've seen it on.

What can I do about the late thing? This is the first and only late report on my 7 year credit history

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@gen-specific wrote:

@Revelate wrote:

@Anonymous late payment date is what I'm interested in too, @OP if that was recent and you had a pretty score otherwise 80 point drop isn't unreasonable. The tradeline it's on doesn't matter, a late on a 25K CSP is the same as a late on a $300 Cap 1 secured.

Had a pretty *WHAT* score? Can you revisit that thought because I don't understand it

The late payment date is reported as November 2013 in my report. This is the second quarterly credit report that I've seen it on.

What can I do about the late thing? This is the first and only late report on my 7 year credit history

What Rev is saying is that if the drop in your score was recent and before that late payment posted, if your credit report was "pretty" or "clean" other than that one derog, it is not uncommon to see such a large drop in your score. Recent lates and collections are very hard on your score.

The UTL you're showing is very high, so that indeed will lower your scores also, as will having balances on several of your cards. You should see a point gain now that you've lowered those balances.

If the late was bad enough that it went into collections, then I don't know if you can get that taken care of. It sounds like you're saying that the business account was derogatory enough that it was closed and sent to a collection agency. If that is the case, I would look into it further. Are you sure that it was paid off, and paid immediately? If someone else is doing the books and bills for your business, I'd review every speck of financial paperwork that you can. That should never have been late or gone into collections, especially if you had the funds to take care of it.

I would call the original creditor and ask for the late to be removed. If the bill was paid to a collection agency, I would send them a letter asking them to please remove the derogatory account from your credit report.

625 EQ FICO Current Score: 660 DCU EQ FICO/ 645 Scorewatch EQ FICO , EX FICO 664, TU FICO 737 (08/2014)
Goal Score: 700 Seedling again as of 07/29/14

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If your prior pull for your credit report and FICO score was in Ocotober of 2013 was the late payment showing on those reports. If not it is the late payment that is causing the most if not all of the 80 point drop.

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@notfancy wrote:

The UTL you're showing is very high, so that indeed will lower your scores also, as will having balances on several of your cards. You should see a point gain now that you've lowered those balances.

So 75-80% on any one card is high? even though it is only near 10% of my total credit utility?

I've heard *A LOT* of conflicting things regarding utilization, and thats the only reason I let one card go so high.

The payment was just 30 days late and that particular credit institution just has collection agencies call about it instead of dealing with it internally. Funny, just a small balance on a $2000 limit card, limits should be factored more into late payments.

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