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kywildcatfanone
Kentucky Fan
Wildcat Country!
Member since Oct 2012
70693 posts

My credit score dropped 42 points for a large credit card purchase
I had no idea that a large credit card purchase would have a negative impact on your credit score when you haven't had any late payments.

Put a new roof on my house while preparing to sell, and put a total of $20K on my card over the course of a month. I did it for the points, and paid the balance off today, but yesterday when I checked, my score had dropped 42 points.


PotatoChip
LSU Fan
Member since May 2014
1649 posts

re: My credit score dropped 42 points for a large credit card purchase
A portion of your score is available credit to debt. If you’re credit is checked when you have a higher balance on a credit cad, it will decrease your score.
This post was edited on 5/15 at 7:18 pm


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LigerFan
LSU Fan
Member since Jan 2014
2466 posts

re: My credit score dropped 42 points for a large credit card purchase
You just didn't pay the balance off before the statement date. As long as your balance goes back to zero you'll be good once the next statement drops


junkfunky
LSU Fan
Member since Jan 2011
27848 posts

re: My credit score dropped 42 points for a large credit card purchase
quote:

Put a new roof on my house while preparing to sell, and put a total of $20K on my card over the course of a month. I did it for the points, and paid the balance off today, but yesterday when I checked, my score had dropped 42 points.


Wait another month and it will go back where it was.


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60
kywildcatfanone
Kentucky Fan
Wildcat Country!
Member since Oct 2012
70693 posts

re: My credit score dropped 42 points for a large credit card purchase
You are saying if you make a big purchase on card, to just go pay it off the next day after it is made? That way you get the benefit, but not the ding on score?


castorinho
Oklahoma Fan
13623 posts
Member since Nov 2010
68037 posts
 Online 

re: My credit score dropped 42 points for a large credit card purchase
quote:

You are saying if you make a big purchase on card, to just go pay it off the next day after it is made? That way you get the benefit, but not the ding on score?
doesn't have to be the next day, for credit purposes you just have to make sure it's before your credit card statement date. The number on your statement is what is reported to the agencies.

For interest purposes, you still won't pay any as long you pay it off before your due date. Note that statement date and due date are two different things.


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SDVTiger
Hawaii Fan
Cabo San Lucas
Member since Nov 2011
44649 posts
 Online 

re: My credit score dropped 42 points for a large credit card purchase
quote:

and put a total of $20K on my card


What's the limit? But of course that will ding your score

Find out when it reports to the credit beaurus
If you are needing a certain score to buy a house just have the lo rapid rescore for you


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meeple
USA Fan
Member since May 2011
6689 posts

re: My credit score dropped 42 points for a large credit card purchase
quote:

You are saying if you make a big purchase on card, to just go pay it off the next day after it is made? That way you get the benefit, but not the ding on score?


I didn't realize this until much later in life. I've never had a gargantuan credit card balance though, only occasionally large, always paid it off before the due date, and I have an excellent credit score.

I had always thought that as long as I wasn't late on a bill payment, or didn't pay it off in full (and accrued interest), that it didn't have a negative effect on my credit score.
This post was edited on 5/16 at 9:12 am


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WildBillJR
Member since Nov 2017
24 posts

re: My credit score dropped 42 points for a large credit card purchase
Like other have said the score bounces back after you pay off the big purchase so just don’t make a big purchase right before you need credit score. For me score comes back 2-4 weeks after big balance paid off. I think because there is a lag in cc reporting balance to credit agencies


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ItzMe1972
Member since Dec 2013
3681 posts

re: My credit score dropped 42 points for a large credit card purchase
I wouldn't worry about it unless you're getting a new mortgage/loan.



RoscoeHarper
Houston Astros Fan
Edmond, OK
Member since Aug 2011
3031 posts
 Online 

re: My credit score dropped 42 points for a large credit card purchase
Nothing to worry about. It will revert back at next cycle. Utilization rate is one of the bigger factors in your credit score, so it can be a big mover.


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kywildcatfanone
Kentucky Fan
Wildcat Country!
Member since Oct 2012
70693 posts

re: My credit score dropped 42 points for a large credit card purchase
quote:

I wouldn't worry about it unless you're getting a new mortgage/loan.



That's why it freaked me out a bit, I'm getting a new mortgage in a couple of months and my score has always been between 810-828 over the last 6 months, and then this drop.

I want to get a sub 2.5 15 year mortgage.


Rando
USA Fan
When IPs were Visible
Member since Apr 2015
18752 posts

re: My credit score dropped 42 points for a large credit card purchase
If that card company does a soft pull to increase your credit line, now is the time to ask.

They see you used it and they will want to give you more.

If the statement hits with a 0 balance AND you get a limit boost, your score will jump a little extra.




The trick is utilization. 30% is not the magic number for credit score. 5% is more accurate.

I've farmed my limits to much higher levels than my spending or income dictates by rotating cards every couple of months and requesting soft pull increases every 6.

Why? The system is flawed and it's easy to manipulate. When I made a certain jewelry purchase recently, I saw very little score dip.


kywildcatfanone
Kentucky Fan
Wildcat Country!
Member since Oct 2012
70693 posts

re: My credit score dropped 42 points for a large credit card purchase
So, another credit score question.

Is there a rule that x number of credit pulls in a given time frame count as one?


I talked to the place where I have my HELOC today, and in order to consider a 100% HELOC, they would have to have an appraisal done, and of course pull credit.

I'm also about in the window of looking for a mortgage, house is about 10 weeks out from being done. Can I request my appraisal and get mortgage rates quoted around the same time, and not have several credit pull dings?


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ColoradoAg03
Texas A&M Fan
Denver, CO
Member since Oct 2012
4784 posts

re: My credit score dropped 42 points for a large credit card purchase
quote:

You just didn't pay the balance off before the statement date. As long as your balance goes back to zero you'll be good once the next statement drops


I hope to do this when I buy a vehicle this summer. Put as much as my buddy (Sales Manager at a dealership) will let me on my credit card for the points, then pay it off a couple of days later when it posts. Pay the rest of the vehicle cash. It would suck to spend that much cash in one transaction and not be able to get any points for it.

Did the same thing with my fiancee's engagement ring. Put it all on my CC and paid the transaction off a couple of days later.
This post was edited on 5/18 at 5:34 pm


achenator
Member since Oct 2014
2099 posts

re: My credit score dropped 42 points for a large credit card purchase
quote:

hope to do this when I buy a vehicle this summer. Put as much as my buddy (Sales Manager at a dealership) will let me on my credit card for the points, then pay it off a couple of days later when it posts.
If he lets you put more than a couple K he's not giving you that good of a deal on the car.


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fallguy_1978
LSU Fan
Half mile from St George
Member since Feb 2018
26035 posts
 Online 

re: My credit score dropped 42 points for a large credit card purchase
Well, on the plus side, the thing that made it drop will go right back up after you pay it off. No big deal other than you paying a credit card interest rate on 20k for a month.


kywildcatfanone
Kentucky Fan
Wildcat Country!
Member since Oct 2012
70693 posts

re: My credit score dropped 42 points for a large credit card purchase
quote:

Well, on the plus side, the thing that made it drop will go right back up after you pay it off.


Bumping to say after I paid off the card balance, I jumped 51 points to 824. Thanks folks, will keep in mind if I make a big CC purchase to pay it off before the statement hits next time.


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fatboydave
LSU Fan
Fat boy land
Member since Aug 2004
14434 posts

re: My credit score dropped 42 points for a large credit card purchase
Available credit


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