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Posted: Tue Mar 28, 2006 9:28 am Subject: How can this be?

We puchased a home last May- my scores at that time were 586, 611, and 642. Not great, but not so bad that we couldn't buy a house.

We may have to move due to a job relocation, so we are discussing selling our house. I was curiour to see how much my scores had improved- we had been told a mortgage paid on time could really help improve scores. So- long story short, I pulled all 3 reports and now my scores are 577, 579, and 636.

How can they have dropped? The only thing that has changed in the last year is that we paid off my vehicle and purchased another one and I received 2 credit cards- one is just a $500 limit and one is a Health care credit card only for dentist and eye visits. We also opened a secured loan to do some remodeling on the house. I have no late payments, nothing derogatory at all happen in the last year. Would these 3 new accounts that are in good standing lower my scores?

So confused-
Crystal

Posted: Tue Mar 28, 2006 9:43 am Subject:

The credit reporting agencies have all bought into an new system of credit scoring recently. That may be what made the change.

Description at: www dot equifax dot com slash corp slash pressroom slash pressreleases slash 2006 slash 2006_03_14 dot shtml

Posted: Tue Mar 28, 2006 9:47 am Subject:

The scoring system is so complicated and secretive, you may never know what dropped your scores. Opening new accounts CAN drop your credit, I'm not saying that it did for sure, there is no way to know. You also may have checked your FICO scores last May, and your credit bureau scores this time. Those are different scores.

~mary

Posted: Tue Mar 28, 2006 9:53 am Subject: What is the difference

What is the difference between FICO scores and CB scores?

I think both reports I checked are CB scores- they are each for the specific CB (experian, Trans, and equifax)

The crazy thing is The Transunion went up- 611 to 636
Experian down from 642 to 577- this is a HUGE jump.
And Equifax down from 586-579.

It just doesn't make a lot of sense to me! But I am very worried about it. We may need to purchase another house if we have to move, and with my scores this much lower, I don't know how it will work out.

Crystal

Posted: Tue Mar 28, 2006 10:17 am Subject:

It is just a different scoring system. Most lenders use FICO to determine eligibility for credit. I would go to myfico.com and check them there if you want an accurate picture of what the lenders will look at.

~Mary

Posted: Tue Mar 28, 2006 1:06 pm Subject:

I've heard that anytime you first open 'new' accounts, that your score drops for a bit. It takes several months of paying on time every month and getting positive reports from the creditors for your score to go back up to what it was. This is just what I've read and heard. shirley

Posted: Tue Mar 28, 2006 1:07 pm Subject:

opps!! my response duplicated itself. sorry! edited by me.

Posted: Tue Mar 28, 2006 1:12 pm Subject:

I would agree Shirley, I have heard the same thing as well.

~Mary

Posted: Tue Mar 28, 2006 5:46 pm Subject:

My guess is that the new accounts are responsible for your lower score. Opening new accounts can cause a slight drop in your score. In particular, opening several accounts in a short period of time makes you more of a "risk" to lenders. Therefore, it generally causes a drop in your score. Keep paying those accounts on time and, as they age and your history remains positive, your score will rise.

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