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How Long to Rebound From a High Balance Hit (Credit Score)?
My credit is fairly new; I've had it less than a year. I've carefully watched my score climb up to 720ish in all 3 bureaus over the last few months. But this month, I put new tires on my card, which put my balance at 50% of the limit. I pay my balance off every month, but by the time I did so, the data had already been reported for the month, and I took a 40 point hit.
I was a little dismayed to watch all of the progress from the last 6 months disappear overnight. I know it takes a long time to establish solid credit, but I enjoy monitoring the progress nonetheless. Assuming there are no further missteps, how long does it take to rebound from a high balance hit?
Will be quick to award Best Answer, any help is greatly appreciated.
Calvin- You're incorrect, and seemingly ill-versed on new credit. In early stages of credit, everything you do adds or subtracts substantially, as there is so little to base your score on. I have only have one card, a 6 month history, no mortgages or other types of debt. Basically no mitigating factors whatsoever. So my high balance this one month is like having a high balance for 20% of my credit's existence. My credit is based on so few factors, each is a great and immediate influence to my score. The longer and more diverse your credit, the more mitigating factors you have to offset any major changes. So yes, a high balance hit is generally only a few points to those with a history (exceeding 18 months), like perhaps yourself. But that is never the case for new credit.
Factually, I went from 719 to 682 this week, and (as I sit here looking at my complete Equifax report on which this is based) the high balance alert is the only change present. This also bears true
for Equifax and Experian. Please don't waste time questioning my ability to read and understand my report. It's not what my question asked.
Thank you guys! As soon as the option becomes available, I'll award a BA. You're the best =)
2 Answers
- bdancer222Lv 78 years agoFavorite Answer
If you paid off the balance, you will see an immediate rebound of your score. You will get those 40 points right back next month. Scores are based on what shows on your credit at that particular time. They are not cumulative.
Don't obsess over your score. It really isn't necessary to check it every month. Once a year is more than enough. Score is only a very small part of any credit decision. What actually shows on your credit report is much more important. You may have a 720 FICO and be denied due to limited credit history, while someone with a 620 FICO and extensive history gets approved.
Source(s): BD - Calvin CLv 78 years ago
this is easy any score you can get is total garbage. Lenders have close to 100 variations of the FICO formula to use so 3 lenders 3 scores no number you can get is worth a dime ever. Your "real" score can spread 100 points depending on the choice the lender uses. For an absolute fact going over 50% one month did not cast you 40 points even if you did not pay it in full that month and carried the balance it would not be more then 3-10 point hit
