Credit Score In Toilet But No Negative Information?

Question

Just got new mortgage on house. Credit score in May was high 680 (not great ut not horrible). Went online to check score last week and now at 560!! No negative credit information whatsoever. No late pays or collections. I do carry high balances on credit cards and that is why I have never been over 700 but I don't understand this. I talked with customer service rep at Equifax and she looked at my credit report and couldn't explain it either. What do I do???

Answer 1

The burden of your mortgage reflects poorly on your credit score.

Think of it this way- If i let you borrow $100 dollars this week and you promised to pay it off slowly. Then you asked me for more. I would want you to pay off the first $100 first.

I'm not saying it's fair BTW. It is total crap. You've been a good person, and they still manage to punish you. But that is how they get away with charging interest rates that are astronomical.

Answer 2

Your new mortgage will have lowered your score by 20-30 points due to a credit inquiry. Now that the mortgage is being reported to the credit bureaus, I would guess that your debt to income ratio went up, which can negatively affect your score. Also, if you have more than 3 credit cards and they all carry high balances, that will cause a big hit to your credit score because now you also have a mortgage. Throw in an occassional late payment and you will be in the 500s for quite some time.

You need to reduce your short term debt (i.e. credit cards). If I were you, any extra cash at the end of the month needs to go to lowering those credit card balances.

Your score will rise as your debt to income ratio decreases. At 560, the credit bureau is basically saying that this individual is unable to assume more credit.

Answer 3

First I would question where you pulled your credit from. I have not found the Internet a very safe or accurate place to pull your credit. Next check out this link: http://www.myfico.com/CreditEducation/
You will see that your new mortgage along with high credit card balances will affect your score. Also pulling credit from different places in a short period of time will drop your score. In about 6 months I am sure that your credit will be back to normal as long as there are no new purchase or inquiries.

Answer 4

Your debt to income ratio is high. I am going through the same myself. Also beware that everytime you run your credit report yourself it is a negative reflection on your credit. You shouldn't check it more than twice a year, other than a mortgage company checking it, bank, etc.

High credit cards don't help either. Having no credit doesn't help either. You're kind of screwed either way. You've basically got to be rich, pay cash for everything and you're golden. If not, you're like everyone else just trying to make it in the world! Don't worry, your credit will get better as you pay items off. Also, store credit cards vs. major credit cards don't help, either. Hope this helps.

Answer 5

High revolving balances will kill your credit score. The scoring models want to see at least 50% of your revolving credit limit available to you at any given time. That does seem like an enormous drop though; typically a paid-as-agreed mortgage is a strong score increaser. Try paying down the credit cards to less than 50% of the limit (yeah, I know, easier said than done!) and see what happens.

Also, when you check your score, you should also be given a list of the top negative factors that went into it (things like the length of time accounts have been open, ratio of balances to credit limit, too many inquiries, etc...) Examine those and you'll have a good idea of what specifically is pulling it down.

Answer 6

I am betting it's the mortgage. The amount you owe on the mortgage and credit cards is high enough to get you a bad score. Meaning taking out another loan right now would be too much. Also if you did a lot of shopping around for a loan the inqueries didn't help you at all. This is just my guess.

Answer 7

Credit cards will lower your score if you charge more than 1/3 of your credit limit (if you have $3000 limit, divide by 3=you should only use $1,000 at any time). If you use more than that, your score will lower. Also, you may have too much credit (too many open accounts with high balances). That will lower your score too. Your credit sounds like it is max'ed out. Work on paying of one card at a time, until you are only left with about 2 credit cards. Don't stop making the minimum payment to the others, just try to pay one off at a time at a faster rate. Use tax refunds and work bonuses to pay them off too.

Answer 8

There could be a number of factors affecting your credit score. One would be the amount of debt you carry. The higher the debt, the lower the score. Although as long as you are paying everything on time, it shouldn't go too low. Another thing that can lower your score is the number of companies actually checking your credit score. Although you may not think that it would adversely affect your credit score, it does (most people don't know that).

Answer 9

I would get another free one and then see if it's still low. You will need to contact the people who gave you negative scores personally. My brother made a huge salary and had great credit, owned several homes, etc. He moved quite a bit and had an outstanding bill for under $100. to a dentist in some state he had lived in briefly. He almost didn't get a mortgage due to this. It is ridiculous.

Answer 10

Because you opened up a "new account" you dinged your own credit score. Best thing to do is pay down the credit cards to 25% of their credit limit, that'll boost your score bigtime!
And....was it a conventional mortgage? Because...a HELOC (home equity line of credit) and some OTHER types of mortgages can show as if you have a "large credit limit revolving loan" that is maxxed out...and THAT hits your credit.