Watch Out for FICO Codes 10, 11

Some people will soon see a drop in their credit scores and have no idea why.

They will think there has been a mistake or that they are being targeted unfairly.

The reason will be “too much holiday shopping” and FICO Codes 10, 11.

If you use more than half of your available credit, then your score will be penalized. If your credit limit is $2,000, and you charge $1,900 and make payments on time, your score will be penalized, because you have used all but $100 of your credit line.

If you charge one dollar above 50% of your available credit, your score will be penalized. That means if your credit limit is $2,000, you should never charge above $999. And even better if you keep the balance below 30%.

The Cure to the FICO 10 and 11 Codes

If you already have balances that are too high, according to Codes 10 and 11, you can quickly reverse that by paying down your balances. Your score will not increase the same day you pay your credit card balance down, because creditors report to Experian, Equifax, and TransUnion only once a month. (You can call and ask which day of the month your credit is reported. It is not the same for all creditors.)

As soon as the credit bureaus receive notice that your balance-to-limit ratio has improved, your score will increase and Codes 10, 11 will no longer dock your points. In addition, it is best for your score if you pay your entire bill when it comes due rather than carry a balance from month to month.

Thank you again for reading. I do my best to provide valuable information for credit usage and improvement.