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JohnnxReb

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My score dropped 91 points. How quickly can I recover?
I've been working with a general contractor about building a home soon- We've got a plan drawn, a lot picked out, a budget written and even a contingent offer on the lot - that is, that my financing is approved. It's well within my income range, only taking 30% debt-to-income, with comfortable payments around 450 a month, given my APR is around 3.7 which has been the average rate I've found each time I look into it. All is well. Well, except...

I opened a Capital One credit card back in August, and just got my first statement a week or two ago. I checked my score this morning, and it dropped to 589, compared to the 680 I had last week! Sadly, this would put me well below the minimum 640 my local bank requires for me to get any sort of construction loan at all, much less one with a decent APR.

We were looking at beginning construction in Feburary, but if my score dropped that low, how am I going to fix it in time to get the financing I need? Will I be able to recover in the next month or two, or am I going to have to put off building for another year?

For reference- I live alone, I'm 21, no bad marks on my credit, never paid a single bill late, and my credit limit is around $12,500. 12k of that being my name on my parents' credit card, which I never touch, $200 on a Stage card, also never touch. (I opened one a few months ago to pay for a suit to wear to my sister's wedding, paid it off a week later, and never touched the card again.), and $300 on a Capital One card, which I use fairly extensively, but pay it off completely within a couple days of each use. (My balance was $280 at the statement, but its been paid off.)

Would paying it off and letting its balance be less than 2 or 3 percent when the next statement is pulled help me recover? Will it be enough?

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If I read your post right, you have 280 balance reported on 300 limit card right? If yes, then pay it down or better yet, pay it to zero before it reports, that will help you recover big portion of score drop, although for the best scores from utilizations is to have 1~9% reported on one card and rest at zero, but if it's going to cost you interest? then I personally don't think it's worth couple extra points. Utilizations has no memories, actually? so are the credit scores, it will reflect whatever the balance you have at whenever it's being pulled. They don't ask what's your scores from May when you applying on Oct, so using your credit card(s) isn't big concern from month to month, just need to pay it down and reflect it on your report before you going to apply for credit/loan...  When you on the verge of getting a mortgage or samlair loans? It's best not to have any credit activities on your report, may it be new accounts or have high credit utilizations, tho the amount in your case isn't very much at all, but it goes by percentages and not the actual dollar amount.

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The card that you are the authorized user on, its balance/utilizations/payment history is going onto your report as well, even if you aren't the one using it, it still can affect your scores. What's your score of 680/589 from? Is the same score model your bank uses or its from CK? We do have 100s score models out there, the score model your lender uses could easily be 50 point lower or 20 points higher than CK's which are provided from VantageScore 3, while vast majority of lenders using versions of FICO score models.

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Having a home of your own is a wonderful thing at any age, let alone at 21, congrats and best of luck.

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You took a hit on the inquiry for the new card, your average age of accounts dropped and on your statement put you at a high utilization on that card.   Definately keep your use down to 10% of the allowable amount.   Being on your parents cards it is prudent that you ensure their payments are timely as on slip or large purchase can affect you greatly.   You may not make your February deadline however, it shouldn't be much longer than that to return you to where you want to be.   You should also ensure you figures are for your actual FICO score and not the scores reported by CK as it uses a totally different formula and credit scoring system.

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JohnnxReb

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I don't use my parent's card. In fact, I don't even have a copy of it- my dad has "my" card that he keeps on him. It's basically just to keep my total credit line number high. The parents' card is 18 years old, and my two cards- the C1 and Stage- are about two months. CK calculates this as an average of 7 years. 

I plan on paying off the card as soon as I get paid next week, then not touching it again for quite some time. I'm hoping I can get my score recovered by Summer, so that even if construction is delayed, I might still get to have Christmas in a nice, new home.

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