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mjgoldstein88

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credit Score Dropped 28 Points in One Month
Long story short. In July I opened up an American Express Everyday preferred card. They pulled my Experian and it was a fico score of 771. With the inquiry it dropped to a 763, which was expected. I had approximately 18% utilization on it the first month and 20% on my other card. I get a free Experian fico score thru Amex, which I checked today, and I see it had dropped another 20 points to a 743. The explanation on AMEX's website was that "Too few accounts currently paid as agreed.In your case this number is too low because you have very few accounts or because you've missed payments recently on some of your accounts." I contacted both Amex and Wells Fargo (had card for 3 years) and they said I paid on time, in full. I looked at my yearly free experian and they said everything shows as paid in full, and on time. Is this normal for opening a new card? I know the average account age changed, but a 28 point fico score decrease seems excessive. Although I only have two accounts, opening one shouldn't crush my score that much. Both lenders and my Experian are on the same page, so I'm a bit lost. My average utilization rate was about 25%.

Thanks in advance.

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The explanation that you received is a "bulk explanation" not taylored exactly for you, but for many. Your problem would be too few accounts, not missed payments if you did not have any. The keyword that should tip this off is the word "Or" in the explanation. A 28pt decrease does seem excessive, especially since you usually get a FICO score increase upon opening a second card. Believe it or not though, your utilization should be lower for scoring purposes, less than 10% utilization is what you want for scoring. Also, make sure that you are getting the same version of FICO scores, I believe that you are, but it is something that you could check on. Scores will fluctuate from time to time, so don't get depressed or anything and keep working to build your credit. I am not sure what your overall credit profile is, but keep in mind that you are not going to have a very good build of credit with only two credit cards. I suggest you do some extensive reading on how to build credit.

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Thanks for your quick response. For what it's worth, Experian said they only had my Wells Fargo credit card on file and that Amex hasn't reported yet. Could that be the cause of it? I don't have any student debts, or need a loan for anything, so my credit history is limited with the two cards. Both scores were Experian FICO Score 8's. I'm still pretty bummed about the most recent 20 points, but I was looking for a way to build my credit history, as well as increaseing my limit.

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I want you to understand that when you are in the process of building credit that there will be many ups and downs, it is normal. You shouldn't worry about the short term and be in it for the long term. The process of building credit for the future will sometimes result in damage today, it's just the way it goes. Focus long term.

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