Questions from the crowd:
OK it is still a small crowd. You can help that. Thanks.
The question. My FICO score dropped from nearly 800 to just under 600. How can that be? I have no late payments and only 1 recent inquiry.
The answer is the same for him as it is for many: the balances on all the credit cards went way up. This is a credit score killer.
In this case it brings out a couple of new twists. First, the cards are used for business. To purchase inventory. This is not a good idea. What I have done with Key Bank is get a business credit card for situations like this. It isn’t reported to the bureaus and doesn’t affect the score.
This is also a perfect use for an equity line of credit. This borrower could have easily accomplished either, especially with a near 800 credit score.
Keep those balances under 20% of the approved credit limits.
Larry Cragun
