Monday, July 23, 2007

Credit score plummets for no apparent reason

I have a credit card that, through their online service, gives me a Transunion credit score. I've heard the score given through these types of services is not exactly accurate, but it's a complimentary service and sort of act like "credit monitoring".

Now, I'm in a position where I may have to pull my full credit report, despite having just pulled it in February. My score has been around 790 (not great, but acceptable) fairly consistently, yet just this month the new score was reported as 755. Now, I know I just opened a credit card (which I am unfortunately closing since I missed the part where my rebates could only be used for one or two things - things I don't have use for), but that certainly should not account for a 35 point drop.

Most interesting is when I clicked on a link that gives me a generic description of why my credit score is such and such, it has 2 items. The first is that my most recent account is very new. Check. The second is that I have multiple accounts that show late payments or derogatory marks.


My only guess is that some company I do business reported a payment as late. I know it's not my credit cards, because I have full account access and can see when payments are posted, and I haven't paid an interest charge in years (my one mistake a couple months ago with making a short payment, it turns out, I was looking at when the billing cycle closed, not when it was due, so I just paid the remainder a day later and of course no interest charge - I was surely having a brain fart that day).

So that leaves me with utilities and a few services. Home security alarm, maybe Sirius radio? I can only think of 2 possibilities.

1) My electric company one month didn't send me a bill. When I knew it should have been due, and didn't have a bill in hand, I called them up and asked them where my bill was. Turns out, they said they mailed it but it never arrived and I was one day late at that point. I had them reissue the bill, paid it, and they removed the late charge. Could they have reported me late?

2) Sirius radio. I have a subscription that automatically deducts from my credit card every 3 months. Out of the blue I get an email from them saying that my account was past due. Confused, I called them up (using the number on my paperwork, not through the email which I immediately suspected was a phisher) and for some reason they just didn't charge my card. The card number was the same, the expiration date was the same; they just decided not to take any money and decided this was my fault. After "updating" my card from the old number to the...same number, they charged it correctly and all was well. Could they have reported me late?

That's all I can think of. Well, I suppose I need to shell out the cash to pay for the report and see just what's going on.


Jim said...

I would be more concerned with seeing that the credit report is accurate, not so much the score. Credit scores are like stepping on a financial scale at any point in the month. If you were at 790 which you don't think is very good, while most would disagree with you, and drop to 755, isn't going to prevent you from getting the better rates for being above 720. I try not to worry about where I am at in the scale anymore because I'm trying to avoid loans and applying for new credit.

Paying bills late or not being properly billed could be reasons for the drop. Make sure it is an authentic FICO score and not the credit card companies own scoring model. It might be a good idea to pay for a report and see if your scores did actually drop like that.

Beyond the Consumer said...

Exactly, thanks for the comment! The score shows me though that something on my report has changed significantly in the last month, and that "late payments" comment confirmed it.

I'm not worried about how the score might affect any rates, since I don't plan on applying for credit...but if there is an error on my report, or a company reported me as late, I need to raise a stink about it!

I do worry about my score when insurance renewals come around, though (which, in fact has happened - my homeowners insurance is renewing next month). Not sure just how insurance companies use your score to determine your rate exactly, but I'd rather not find out!

I plan on pulling my report this weekend.

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Beyond the Consumer said...

Thanks, Frank Bruno. Your comment (ahem, ad) is a perfect example of why people need to educate themselves about their credit and personal finance in general.

There is no quick fix or software that can help you improve your credit score. The only thing that can do that is 1) time and 2) consistently following the terms of your loans - paying them on time and at the correct amount.

If you have incorrect information on your report, that's an entirely different situation. I posted something about this earlier

Unless you have a serious identity theft problem (in which case the person you would be paying is a lawyer), paying someone for credit report services is just plain silly.