Credit score went down in one month.

guest_999 said:
It is a common myth among many cc users. Using more than 30% of your combined credit limit of all CCs for 1-2 months isn't going to affect your credit score beyond 4-5 points as long as you pay all the due amt on or before due date.
@vishal_k
Click to expand...
He was paying off only the minimum due at the end of each cycle, that's why.
 
PunkX 75 said:
He was paying off only the minimum due at the end of each cycle, that's why.
Click to expand...
Yes that's the reason not just high credit limit utilization. Even if he had 2-3 more cc with higher limits which would have lowered his credit utilization ratio the significant drop would still be there.
 
PunkX 75 said:
He was paying off only the minimum due at the end of each cycle, that's why.
Click to expand...
I asked a friend of mine who used to work as credit card salesman and he said as long as you make the payment even the minimum the CC company does not care , your score would be the same as long as you keep paying them. And i did confirm this with another guy who haven't made a single full payment in 8 months his score went from 739(last year) to 760 now.
 
NikhilSingh25 said:
I asked a friend of mine who used to work as credit card salesman and he said as long as you make the payment even the minimum the CC company does not care , your score would be the same as long as you keep paying them. And i did confirm this with another guy who haven't made a single full payment in 8 months his score went from 739(last year) to 760 now.
Click to expand...
It also depend on credit bureau's algorithm being used at the time. For example, experian recently changed its algorithm leading to a drop of around 100 points in many ppl experian score while still having good cibil score as usual.
 
guest_999 said:
It also depend on credit bureau's algorithm being used at the time. For example, experian recently changed its algorithm leading to a drop of around 100 points in many ppl experian score while still having good cibil score as usual.
Click to expand...
That could be the reason why my score went down that much.
 
guest_999 said:
It is a common myth among many cc users. Using more than 30% of your combined credit limit of all CCs for 1-2 months isn't going to affect your credit score beyond 4-5 points as long as you pay all the due amt on or before due date.
@vishal_k
Click to expand...
Didn't knew that. I never went beyond this limit in past 11 yrs. Through credit card, I spend only that much amount which I can pay through debit card. Only difference is I gain some additional interest through sweep in facility till next bill date.
 
If you keep paying only the min. due amount and think your are paying off the entire bill which is illogical is obviously going to affect the credit score few months down.
As for credit utilization, if you are constantly using up to 50% quite often and occasionally beyond 50-60% and ensure to timely/before due date pay the entire bills the score never gets affected. My personal exp.
 
NikhilSingh25 said:
I asked a friend of mine who used to work as credit card salesman and he said as long as you make the payment even the minimum the CC company does not care , your score would be the same as long as you keep paying them. And i did confirm this with another guy who haven't made a single full payment in 8 months his score went from 739(last year) to 760 now.
Click to expand...
If your utilization stays beyond 30%, and you only pay off the minimum due, your score will drop at some point.
 
Back
Top