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onionknightpld

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My score dropped over 90 points in 4 days?
Ok so I've been working on my credit. I've been doing really good. Opening credit cards, making payments on time and check my score often. So I had two cards with $850 total balance between the both of them. Monday I paid them both off in full. I had a credit score of 633 ( I started at 504). Under my balance for all my credit cards it had me sitting at over 1k in balances, I actually had over $1500 in balances. Anyways I had 4 days until the next update from CK, I checked today and my Score has dropped over 90 points! The only difference between then and now is they added over $500 to my credit balance. I went to the credit simulator and went down to what I actually owe to my CCs and it took me up to 630. $500 really caused me to lose over 90 points? And how long will it take for the CC company to update my balance info on reports?

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Shot in the Dark

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So, without a little more information I cannot give you an accurate answer, so I will take a shot in the dark.

A part of your credit score is credit utliziation.  This is how much of your available credit are you using.  So, for example, you have three credit cards and each card has a limit of $500.  Your total available credit is $1,500.  As you approach this total availble limit, your score will drop.  Most experts recommend your keep your cards around 10%-30% or lower of your available limit.  However, what people often overlook is that each individual card utilization matters as well.  So you want to stay 10%-30% below your limit on EACH card as well.  Obviously 10% is better than 30%.  Lower is EVEN better.

The next thing to consider is when your credit card companies report to the credit reporting agencies.  They often only report once a month or maybe even every other month. If you make a $500 purchase on a $500 limit card on Monday then pay it in full on Thursday but the company reported on Tuesday, they are going to report a $500 balance equating to 100% utilization. 

To recover, pay of your balances and keep them that way until your company reports again.

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