Question

Happy Mother’s Day first of all. Second I woke up to an ugly email stating my credit score had decreased. Okay I am wanting to purchase a home next year. My credit has been at the 700’s , but the loan officer said I definitely need to pay off credit cards and the come back and apply. Well I decided to pay double only ($60) plus added an extra $100 on a card that’s balance is $1, 000 & my credit score when down 64 points. 64! How ?!?! Can someone help me . Because when I’ve gotten advice from lenders they specifically suggested I pay my cards off , but its lowering my score  

Answer 1

It'll lower it at first. Be patient and keep the use at less than 10%. It'll come back up. You're doing great!  

Answer 2

Happy mothers day! Its important to be patient because your score change, the more you pay off the better it will be. Make sure that you do not close the card!  

Answer 3

This same thing keeps happening to me. So frustrating

Answer 4

Did the loan officer do a hard inquiry to run that number? Because that may be where the 64 points came from. Just a heads up, that number is usually only good for them for 120 days so if you don’t buy within that timeframe, they may need to run it again causing it to lower more.  

Comments

@examen Teresa oh gosh . I’m not sure . but I think he did a he did a hard inquiry in February . But I’m seeing it decrease tremendously this month  

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@metalworking doing a hard inquiry several times will affect your score. ask him to do soft inquiry.  

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@metalworking yes they usually do hard inquiries  that same thing happened to me. If you check your credit report it’ll probably list the mortgage company he works for in your credit inquiries section. Next time you authorize them to do it I would just make sure it’s when you’re ready to officially go through the process. I hate that they don’t warn you about that  

Answer 5

The score you see is totally different from the one he will see when the paperwork goes through. Don’t focus on your score!  

Comments

@cornwall alright ! I’m not going to look at it then & just keep paying . it scared me and made me so mad  

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@metalworking I'll bet! Not a good thing to wake up to. Seriously, the consumer facing score is never what the lender sees. Just follow his advice, you're good!  

Answer 6

When you pay off loans and debt your score can take a drop but it will go back up! Being debt free is more important! You’re not buying for a year, your credit will definitely be up in a few months. Don’t open anymore lines of credit and try just pay off the debt and save save save! The score will get better

Answer 7

Your debt to available may have been too high and they needed it lower before they can finance you.  

Answer 8

Check and see how many hard inquiries you have also who is reporting what. Every hard inquiry lowers your score. And mortgage companies never see the same thing you do. Their scores are usually about 40-50 points lower.  

Answer 9

Who sent the ugly email? Was it the loan officer or a cc company?  

Comments

@unknow it was credit karma and i have credit report through Bank of America

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@metalworking for what its worth, I've found Credit Karma to be inaccurate regarding actual scores. They said hubs was over 770 and in reality it was only 670.  

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@metalworking they are a for profit business so I guess I would look at what they were offering for a solution to your"issue" and see if it makes them money. I have not used them, my cc shows my credit score when I log in.  

Answer 10

Mine has dropped, as has my husbands. Doesn’t make any sense. When I went through the accounts several haven’t reported since April. I wonder if that could be why?  

Answer 11

It will go back up.  

Comments

@decline thanks . i guess it just scared me it went down 64 points  

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@metalworking yeah, the same thing happens when you pay off loans too like a car loan or a personal loan or something. It will go down temporarily but then bounce right back up.  

Answer 12

Mine dropped recently as well, and it was showing that a bunch of accounts had only recently updated (like one was showing a credit limit increase on a card that happened 3 years ago, but it was just now posting to my credit score).  

Answer 13

It might be wise for you to step back, and focus on paying down debt and not watching your credit score so closely now. Really budget by telling your money what to do, (not the other way around) and being as aggressive as you can about paying off your debt. Then focus on saving for your home purchase. There are other detailed posts here in the last 1-2 weeks that specify the costs of home purchase and ownership. Are you ready for all of those costs? I truly hope you get to your dream, yet get there in a good financial position. It’s worth the wait, too early it can feel like an anchor chained to your neck. Hold on and good luck!  

Comments

@entrain43 thank you for all your advice definitely taking all that into consideration!  

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@metalworking there’s so much out of our control in this difficult time, it makes sense that we want to focus on some things in particular. I worry if you are waking up and checking email for news on your credit score, that is stressful! Perhaps check out Dave Ramsey, lots of good advice there too!  

Answer 14

Lenders are not always good credit advisors!  

Answer 15

Lenders care about more than just your score. It might be debt to income ratio. Also, shop around for lenders. It's okay to apply with more than one place. Credit unions are good