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Credit score dropped 35 points

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FreeWilley
Posts: 464 - Karma: 134
According to Credit Karma, my credit score dropped 35 points from the last time updated. My score was considered Excellent, and now it's dropped to Good. I did however just add a new credit card. Do you think that may have had something to do with my score dropping? I don't have any late payments, so I'm not sure what it would drop so much.
Dec 19 2013 7:22PM
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GayWolf420
Posts: 37380 - Karma: 119,948
1
Dec 19 2013 7:23PM
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cornholio
Posts: 3952 - Karma: 3,057
when you apply for cards they pull your credit score which usually will make it go down slightly. not a big deal, it will go back up. just don't be applying for more cards like once a month or anything
Dec 19 2013 7:24PM
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iLLbiLLy
Posts: 2865 - Karma: 2,631
to build on this:

Its actually better to apply for all your credit cards at one time, as multiple credit pulls close together don't lower your score as much (they consider it to be 'shopping' around).

Also is your credit utilization up this month? Mine was at 85% last month and by reducing it below 30% my credit when up 40 points.
Dec 19 2013 7:34PM
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cornholio
Posts: 3952 - Karma: 3,057
yup this guy knows
Dec 19 2013 8:04PM
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howlongcanausern
Posts: 4982 - Karma: 1,737
herp derp checking your credit score reduces it
Dec 19 2013 8:13PM
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FreeWilley
Posts: 464 - Karma: 134
Credit karma doesn't
Dec 19 2013 9:02PM
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cornholio
Posts: 3952 - Karma: 3,057
somewhat true, however if you have just applied for a credit card you're allowed to get your scores for free (regardless of if you're approved/denied) which would not force another hard pull on your credit (and make it go down further)
Dec 19 2013 9:12PM
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theVan
Posts: 204 - Karma: 225
holy shit there's a lot to know, damn.
Dec 20 2013 12:19AM
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iLLbiLLy
Posts: 2865 - Karma: 2,631
herp derp how bout no...

Only "Hard Inquiries" hurt your credit. A hard inquiry is made when you apply for credit cards, loans, or if a business checks your credit.

A "Soft Inquiry" is used when getting your own credit report (and also by credit card companies to pre-qualify you for their cards)
Dec 20 2013 6:55PM
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t-roy
Posts: 4041 - Karma: 52
you can always make an inquiry into the credit monitoring agency to dispute a ding on your credit if you believe it shouldn't be there, or to ask why it got lower.


Dec 20 2013 7:25PM
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Sno.
Posts: 12155 - Karma: 6,152
credit karma only shows you the score from one of the three bureaus-- I think they use transunion, your actual score which is the mid-score of the three bureaus could be a lot different than the one shown on credit karma. However, if you mean it went from excellent to good on credit karma alone, then transunion dropped your score some-- probably some for the credit inquiry (its usually about 15), and maybe some for increase in credit card utilization?

My credit score on credit karma went down recently too, and its cause i went higher on my credit card balances.
Dec 20 2013 7:41PM
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SlurmrnHurnyBurn
Posts: 315 - Karma: 765
Is it a smart idea to not even use credit cards? I'm 19 and haven't gotten one yet because I don't really see a need for one. But I'm ill informed on the matter.
Dec 20 2013 8:16PM
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Rachy
Posts: 4355 - Karma: 2,761
I'd get one while you still have no credit and maintain a low balance on it... as in like 10%. Or do something where you only buy gas on it and pay it every month or something like that.


Reason being... my student loans destroyed me after I graduated. I couldn't pay them. I couldn't find a job. I had to consolidate at a crap rate... I only had this and a car payment on my record. My credit dropped from great to poor making it impossible for me to get a credit card and only able to rely on on time payments for it to improve.. which takes FOREVER.

I finally got a secured credit card with a pretty high balance on it. It's helping pretty fast, but I always have that money tied up now. So it's good as long as you are very financially secure and have another way to cover any emergencies.
Dec 20 2013 8:23PM
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Sno.
Posts: 12155 - Karma: 6,152
Get one! Get several. You don't need to use them. Just having them establishes credit and credit history. Your length of credit history plays into your score and without any accounts or loans you'll have no credit. Its even better if you are able to use one of them, though. Use one for gas purchases and pay it off every month. This establishes good payment history. Even if you don't pay it off every month that's ok, but keep your usage at or below about 30% of your credit limit.
Dec 20 2013 8:25PM
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Charlie_Kelly
Posts: 11954 - Karma: 12,297
I pay 4 different credit payments: ntb (mechanic), bill me later, best buy (got laptop for "free" from mom but have to make monthly payments, and student loans (sallie mae, $60 a month in interest fees alone). Its a lot to handle and stay on top of (ive had two late payments). Ive never checked my score but imagine it isnt very good. Whatever I have two years to improve it. A lot of good information and adivice in this thread. My .02 to the credit newbs, do your research, pick a credit line that works for you, and pay your bill on time (and more than the minumum). Credit is going to be how you afford that new car or take a mortage out for the home you always wanted. Dont fuck it up.
Dec 20 2013 8:33PM
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Tinga
Posts: 11349 - Karma: 2,333
2 is the best number of credit cards to have. so if you added a third card maybe they dinged you for that. also like said above you have three credit ratings so they deviate for different reasons at different times.
Dec 20 2013 8:40PM
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Sno.
Posts: 12155 - Karma: 6,152
Yes this. Do not get a late payment folks, it drops your credit about 70-100 points. But, if you do get a late payment (late means anything past 30 days late) you can talk to the company and sometimes they will remove the delinquency. If you are between 1-30 days late you may get dinged with a fee or a higher interest rate but it doesn't count as late on your credit.
Dec 20 2013 8:41PM
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Sno.
Posts: 12155 - Karma: 6,152
Why 2? On credit Karma is states that 21 accounts puts you in A status. Granted that includes loans, previous closed accounts, mortgages, etc. I have 6 credit cards, I only use 2-3, but I have great credit. In fact when I paid off some credit cards years back and canceled them I was told that I shouldn't have canceled them, as they like you to have accounts with age...so by canceling my first card I got rid of my oldest account and my score dropped.
Dec 20 2013 8:44PM
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Sno.
Posts: 12155 - Karma: 6,152
And actually, sometimes more is better for your utilization percentage. It is better to have low balances on 3-4 cards than to have one maxed out.
Dec 20 2013 8:47PM
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Tinga
Posts: 11349 - Karma: 2,333
I'm sure lenders would see loyalty as favorable. so if you have more than two how would they consider that loyal.

Why do you need six? unless they are like store credit cards or something.
Dec 20 2013 8:51PM
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Sno.
Posts: 12155 - Karma: 6,152
I have literally never heard that before--you mean loyal to the creditors you've taken cards out with?

I don't need 6, I have two store cards that I rarely use and then four regular ones. One is an Alaska Airlines card I use for all of my purchases-- like a debit card--and then pay the balance from my checking account--that way I get miles for all purchases. Another one is a 0% interest card that holds some debt leftover from my wedding and some tuition charges. The other two are cards I rarely use, but haven't closed based on the reasons i stated above regarding credit history/length.


Dec 20 2013 9:02PM
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SlurmrnHurnyBurn
Posts: 315 - Karma: 765
I see, thanks to you too snow bunny +k
Dec 20 2013 9:07PM
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Gnarmander
Posts: 104 - Karma: 12
How are you paying SallieMae on a credit card? They only let me pay direct from my bank account, maybe I'm missing something? It's about $500/month, it would be nice to at least build up some miles while paying those guys...

Also, like everyone is saying, start early and pay it off every month so you don't ultimately end up paying way more for whatever you buy due to interest - 15-20% adds up real quick.
Dec 20 2013 10:36PM
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bakedpow
Posts: 8770 - Karma: 10,467
looking into getting my first card soon so im gona hop on in this thread.
Dec 20 2013 10:43PM
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Errl
Posts: 2082 - Karma: 451
Really wished I picked one up last year... I feel like a child because I need to have my Dad help me out with a new Jeep. That said, can I get a card with a low limit (let's say $500, if that is considered low) and pay my car payment with the card (approx $230/month) good idea or not?
Dec 20 2013 10:45PM
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Sno.
Posts: 12155 - Karma: 6,152
neither my mortgage, nor my car loan accept credit card payments. I suppose you could order convenience checks with your credit card and use those-- but they're considered "cash advances" and so they come with fees, higher interest rates, and no benefits (miles).
Dec 20 2013 11:07PM
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skiierman
Posts: 28699 - Karma: -5,563
It's hilarious when people think that your credit score is only based on making payments on time... I didn't read 90% of what people are posting (a much higher average than usual) but your score is based on much more than that. I've been dinged for not using enough of my credit card and for having a debt that far outweighs my current assets, which apparently includes student debt. I did notice someone saying that it can change quickly which is true unless you really fuck up.


Oh wait, something insulting...

I hear your credit goes up 50 points if you skull fuck a homeless person and send the pic to one of the three major credit bureaus. They love that shit.
Dec 20 2013 11:13PM
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DirtYStylE
Posts: 3652 - Karma: 8,888
Getting a credit card at a younger age is definitely preferable. For once you wish to acquire an asset that is worth more than your current monetary funds. You must place the remainder of your assets equity into credit, which is a borrowed sum of money. In order to receive said credit, you must have a credit history that shows that you meet the level of trustworthiness that is acceptable for the amount of funds that is requested.

A credit card is one of the best and easiest ways to boost your credit score.
Your credit score is determined by 5 factors:

Payment history (35%)

Amounts owed (30%)

Length of credit history (15%)

Types of credit in use (10%)

New credit (10%)
Dec 20 2013 11:16PM
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cornholio
Posts: 3952 - Karma: 3,057
if you can find a rewards card that gives cash back or some sort of points then i'd say it's a good idea, just plan on paying the card off every month (which shouldn't be a problem if you're planning on paying the car loan once a month. you'll typically save 1-5% in whatever you get back from the card so why not
Dec 20 2013 11:24PM
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Sno.
Posts: 12155 - Karma: 6,152
yes, this. I have a miles card and ever since getting one I haven't paid for any airfare on any of the trips I've taken.
Dec 20 2013 11:29PM
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cornholio
Posts: 3952 - Karma: 3,057
i've been to europe twice in the last 2 years off airline miles. i'll take a free flight to hong kong this winter, and free first class flights to and from thailand next spring. most of those miles were just sign up bonuses
Dec 20 2013 11:46PM
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bakedpow
Posts: 8770 - Karma: 10,467
what airline do you have a card with?
Dec 20 2013 11:51PM
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cornholio
Posts: 3952 - Karma: 3,057
uhh... all of them? can't remember which ones are active off the top of my head but have done delta, usair, 2x american, united, probabably another one i've forgotten.

you have to pay attention and keep up with them or you'll get hit with yearly fees to keep most of these types open. MOST of them will waive the fee if you call to cancel when it hits your statement, just tell them you can't afford the monthly fee or you don't think it's worth the payment. hell one of them even paid me $10 to keep the card last month when i called to cancel lol.

airline cards also usually come with yearly perks like free lounge access or cheap companion tickets. the signup bonuses vary significantly so you don't want to get one at the wrong time. theres travel blogs out there that let you know the good deals, my girl keeps up with that stuff and lets me know when to sign up for one.
Dec 21 2013 12:02AM
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cornholio
Posts: 3952 - Karma: 3,057
uhh... all of them? can't remember which ones are active off the top of my head but have done delta, usair, 2x american, united, probabably another one i've forgotten.

you have to pay attention and keep up with them or you'll get hit with yearly fees to keep most of these types open. MOST of them will waive the fee if you call to cancel when it hits your statement, just tell them you can't afford the monthly fee or you don't think it's worth the payment. hell one of them even paid me $10 to keep the card last month when i called to cancel lol.

airline cards also usually come with yearly perks like free lounge access or cheap companion tickets. the signup bonuses vary significantly so you don't want to get one at the wrong time. theres travel blogs out there that let you know the good deals, my girl keeps up with that stuff and lets me know when to sign up for one.
Dec 21 2013 12:02AM
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Rachy
Posts: 4355 - Karma: 2,761
Since you're using credit karma... On that site, I have an A for accounts, an A for no delinquencies or whatever, an A for credit checks (only 1), a B for age of history, N/A for credit card usage, and an F for payments as only 60 show and I have 2 late payments that occurred before I was able to consolidate... So in the last 3 years or so, I haven't had a late payment. I paid off my car in which I never missed a payment, and everything else is stellar... Yet I have a D rating because of those 2 missed payments 3 years ago and no credit cards. We shall see how this secured card helps.
Dec 21 2013 4:09AM
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Charlie_Kelly
Posts: 11954 - Karma: 12,297
I'm not. I was using it as an example because missing those payments with affect your credit too.
Dec 21 2013 7:11AM
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Errl
Posts: 2082 - Karma: 451
Sounds like a good idea. I think I'll have to go with one of the money back ones as I won't have to pay to fly anywhere or the next six years
Dec 21 2013 8:38AM
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cornholio
Posts: 3952 - Karma: 3,057
when you're looking don't limit yourself to only money back cards- their are non-airline based rewards ones you can do too. for a while i was using one where i could cash in for target or amazon gift cards. you can get almost anything at amazon.
Dec 21 2013 9:40AM
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