Question Details

An Antagonist, Home Buyer in Toms River, NJ

Sovereign Bank cost me 50 points OFF my credit score!

Asked by An Antagonist, Toms River, NJ Fri Mar 1, 2013

Did this happen to anyone and does it matter when applying for a mortgage loan? - For years - my credit score through online free Credit Karma ranked around 780. Today I planned to apply for a mortgage loan and checked my credit - March 1, 2013. It dropped 50 points! The reason? Sovereign Bank changed their /my credit card from MasterCard to Sphere Visa. My account remained open but their change appeared on my credit report showing that my credit limit went from $18,000.00 to ZERO. Thus the 50 point drop in credit. I had no say in their "upgrade". I have the new card with the same credit limit etc. I never had one late payment with Sovereign. WTF? Through absolutely no fault of my own, my credit went from excellent to good. Does anyone know how to remedy this? I appreciate the help

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Answers

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Credit scores will vary when looking at it via a consumer site such as credit karma and when a lender pulls it. The scores will always vary. You could pull all 3 of your scores and walk into a bank, and a car lot, and all three reports would reflect very different scores. Each institution uses a different scoring model to determine the score.

The kind of credit card will not impact the score, the balance will. So now your credit line reflects a zero credit limit available? If this is the case you can easily obtain those 50 points by opening a secured visa with capital one which reports as unsecured. Though the limit will equal your deposit. The minimum is $300 I believe, but showing a credit line of 100% available regardless of how minimal, will increase your credit score by a minimum of 50 points.

It is not the credit line amount that helps your score, it is the percentage of available credit.

For instance, two different people apply for a mortgage. One has a credit card with a credit line of $300 and owes $45, thus their available credit is 85%.
The second person has a $5K credit card with $1000 available credit which is 20% of the credit line.
In the world of credit scoring models the one with the lower credit line would have the higher credit score because he has more available credit. You would think it is the opposite but it is all based upon available credit percentage.

I hope this helps you understand credit scores.

Have a great day;

Christina Solorzano;
CEO & SR Credit & Mortgage Consultant of
Everlasting Credit Repair
Retired Mortgage Banker
http://www.everlastingcredit.com
0 votes Thank Flag Link Sat May 18, 2013
I would first find out why Sovereign isn't reporting your credit limit. Is it a card with no pre-set spending limit? I'd reach out to Sovereign directly.
0 votes Thank Flag Link Thu May 16, 2013
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