Credit Advice

Have a question? Have advice to share? The combined knowledge and experience of everyone in the Credit Karma community can help you. Enter your question or help others below to get started!

Question

Posted in Credit Scores
Profile Image

Question By
switters72311

4 Contributions
0 People Helped
Why is my credit score lower than I think it should be?
My credit score was hovering around 785 for the last couple of years, but just dropped to 724. Only two things happened during that time (as far as I can tell) that might affect the score: I added a new credit card, and I see 2-3 "credit limit activity" alerts on Credit Karma. My credit utilization is 38%. Could that be the problem? If I use the "Credit Score Simulator" tool, and decrease my balances by $5,000, and increase the limit on one card by $5,000, my score goes back up to 795.

But even then, I'm wondering why my score isn't higher. I've never missed a payment, I've had credit cards for 20 years, I have a car loan that is paid like clockwork, etc. My younger brother has a credit score of 850 with the same type of history. The only difference between us is that he has a mortgage. Could that be it?

Your Credit Scores Should Be Free. And Now They Are.

View your scores and reports anytime.

SIGN UP NOW
All Responses

Results 1-3 of 3Results per page: 5 | 10 | 25Page 1 of 1   Previous | Next
Top Contributor
91 Contributions
79 People Helped
Most Helpful Response

Helpful to 1 out of 1 people

Also, Yes, adding mortgage will take your score in the 800s (with all the factors put together).

4 Contributions
0 People Helped

One more question....

What if being listed on someone else's account is affecting credit utilization? For example, as far as I can tell I'm still listed on one of my parent's accounts, though I haven't used their card in years. When I look at the "credit cards" section on CK, it shows their account and it shows a balance of $4,321 as of January 2012. That balance is then being included in my total credit utilization, which I believe is adversely affecting my score. 

And why is a balance from more than 1.5 years ago showing up at all?

Top Contributor

Reply by
AADeo

91 Contributions
79 People Helped
Helpful to 2 out of 2 people

As you can see with score simulation, decreasing balance and increasing available credit takes you back up to 795. This clearly states utilization ratio is the major culprit. That brings us to the card that belongs to your parents. The balance of $4,321 (almost $ 5K) is the bug. Taking your name off the card will make that thing vanish and you have extra 4K credit available!

One note of caution: Take into consideration how old is that (parent's) account. Taking off an old account from your report will decrease your average credit history and your score will take a big hit. This won't be a big problem if you have another account that has a long history (as good as this one). Take this into account before you remove it.

Also, re: your last query- every unpaid balance (regardless of it's age) will show up on your file.

4 Contributions
0 People Helped

AADeo,

Thanks for your response.

The strange thing about the balance on my parents' card is that they pay their card off every single month. They are extremely responsible about that kind of thing. They NEVER carry a balance on any of their cards. I confirmed this when I spoke to them last night. I also confirmed that they removed me as an authorized user many months ago.

Given that this is still showing up on my credit report, and it is probably affecting utilization, what do I do now? Do I need to send a dispute letter to TransUnion?

This whole credit score seems like a big racket. I just decided to pay off my student and car loan in full to become 100% debt free, and learned that this will also hurt my credit score. I saw elsewhere that credit score is just a measure of how good a debt slave you are and how much money you can generate for creditors. 

Top Contributor

Reply by
AADeo

91 Contributions
79 People Helped

Hey switters72311,

You are very welcome! Also, I agree on your point (credit score means how good a debt slave you are). In fact, according to Dave Ramsey, the credit score is "I LOVE DEBT" score. The credit score system does have some serious flaws, but knowing that, the creditors many times treat the customers as if they have committed sins for bad marks on credit (like, for example a statement  of "you have FIVE enquiries on your credit file, sir!" will be thrown at you as if you have committed five crimes). Anyway, the bottom line is the flaws in the system are hard to predict, and more difficult to correct, but there are few ways to do it.

Regarding your situation, I STRONGLY RECOMMEND FILING A DISPUTE with each credit bureau that is showing the wrong information. You can't let them ruin your 20 years of hardwork and especially, your parent's diligence. However, be very specific and precise about it. Here are few steps to follow:

1. Call each bureau and get the information about how to file the dispute. I think Experian and Equifax allow online filing, but TransUnion generally takes mail-in applications.

2. If mailing, use certified mail, and keep all the records of the communications.

3. Write precisely what information is incorrect and how that needs to be corrected in a one-two page cover letter. Send all pertinent information regarding it  along with the letter (may be the latest statement of your parent's card showing paid balance, etc.).

4. Give them 30 days and then start following. I have experience with TU and they are bit painful because they prefer to communicate only through snail mail, so be patient.

It's really frustrating when you have done everything right and still pay the price, but sorry, this is the only way I know of. Good luck and if you have questions, feel free to ask.

Results 1-3 of 3Results per page: 5 | 10 | 25Page 1 of 1   Previous | Next

Your Credit Scores Should Be Free. And Now They Are.

View your scores and reports anytime.

SIGN UP NOW

Reply to this Question

Write your response:
Enter Your Comments

The Credit Advice pages of the Site may contain messages submitted by users over whom Credit Karma has no control. Credit Karma cannot guarantee the accuracy, integrity or quality of any such messages. Some users may post messages that are misleading, untrue or offensive. You must bear all risk associated with your use of the Credit Advice pages and should not rely on messages in making (or refraining from making) any specific financial or other decisions.