why did my FICO suddenly drop 100 points?

Question

i had 690 then i did three things...

1) paid off $4000 credit card
2) Opened a $300 credit card (rewards card)
3) was turned down for another credit card

and my score dropped 100 points!!!! and after 3 months it's still in the 500s.

Answer 1

Paying OFF credit cards doesn't raise your score in itself. Lowering the % of your line that you are using does.
Making minimum payments helps your score.

Too many inquiries will lower your score. A late payment will lower your score.
Something doesn't sound right. Was there a #4 ??

Answer 2

First of all, there are 5 contributing factors to your credit score:

1) On time payments 33%
2) Amount of limit used 33%
3) Length of credit history 15%
4) Types of credit used 10%
5) Recent credit applications 8%

So basically, if you were always maxed on this card you just paid off, and JUST applied for two cards, then that would affect your score, as well as if the cards are your only source of credit information.

Answer 3

Make sure you don't make these mistakes.

1. Not checking credit reports for wrong credit card charges can land you in serious trouble, and adversely affect your credit score. All this for only a simple fault that you didn't keep track of your expenses, false charges increased your monthly credit card bills, which you weren't able to repay and got a negative mark in credit report. Isn't that silly?

2. Procrastination, while paying bills ensures negative remarks in credit history. It's the credit cards with big outstanding balances which will hurt you the most in terms of interest rates, and if you keep on paying for credit cards with low balances and ignoring the bigger ones, you are doomed.

3. On a big buying spree you exhaust your credit card limits and max out. What will it do to your credit report? Simple, you will get a negative remark. Try spending less than 30% of your credit card limit and, it will keep you in good books of credit rating agencies. Go overboard, and there are penalties to be paid.

4. When you stay with a credit card for long and keep the accounts in good health it helps a lot in terms of building good credit history. Don't ever cancel that credit card, it will wipe out all the goodness. Remember old is gold. Cancelling new credit cards doesn't hurt much on credit history but doing that to an old credit card will invite a backlash. Read more from: http://www.credit-card-gallery.com/article/254,5_small_mistakes_that_cause_big_damage_to_a_person's_credit_history

Answer 4

If the CC debt was all you owed they can't do a ratio. Try to use your credit card just before making your payment so you always have something on there but pay in full to avoid interest. Applying for credit does lower your score but it should bounce back.