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Question By
peaceoutaly

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Why is my score dropping? Will it come back up once paid off?
My score was in the mid-700's ("good" range) however it just dropped almost 80 points. Within the past month I opened one new account, have a 100% on-time payment history, and my credit utilization is only at 10% which is again within the "good" range. No new accounts in collections. We are trying to buy a house within the year and this drop has me panicking. If I pay off all cards at the end of the month like I typically do and have utilization drop to 0-5% will my score increase? Or since I added a new credit card will it just be a matter of time?

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I don't know if your new account is a credit card or a loan. You state you have no new accounts in collections. I take that to mean you have some older accounts in collection. A hard inquiry was performed on your credit so that will drop a bit.  If you have a long history  with one inquiry I would expect your score to drop five or ten points.  Inquiries can have a greater impact, however, if you have few accounts or a short credit history. Large numbers of inquiries also mean greater risk: people with six inquiries or more on their credit reports are eight times more likely to declare bankruptcy than people with no inquiries on their reports.  

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