Woman in a cafe having problems with the credit card

You pay the same bills, have the same number of loans and are continually responsible with your credit cards, yet your credit score changes from month to month. It can seem like a credit score fluctuates up or down like the seasons even if you seemingly haven’t done anything to influence it.

Sometimes your score does change based on factors outside of your control, but most times your behavior influences your score in ways that may not be obvious. Let’s take a look at the factors that influence your score and a few reasons as to why it might change even when you don’t think you’ve changed your behavior.

Why Did Your Score Change?

Your credit score is calculated based on your payment history, the amount of money you owe, the length of your credit history, the type of credit you have and new credit that has been added, so a change in your score means one of those has changed.

Your Credit Utilization Has Changed

Your credit utilization ratio is the amount you owe on your credit card relative to your credit limit. It influences your credit score, so a change in either of the two can cause your score to adjust.

Have you charged more on your credit card lately? If so, your credit utilization may have increased, which can negatively impact your score. Typically, having less than a 30% credit utilization (i.e. spending $300 or less if your credit limit is $1,000) can keep your credit in top shape.

Check to see if your credit card company has increased or decreased your total limit. Often credit card companies will tell you if you’re eligible for a change in credit limit, but they could alter it without you knowing. If your spending habits remained the same, an increase in your credit limit would decrease your credit utilization ratio, which can positively impact your score. A decrease in your credit limit would increase your utilization ratio; thus, your score could go down.

Something Was Recorded on Your Credit Report

Think back on your payment history – have you missed a credit card payment in the last few months? Were there any bills that you may have missed in previous months?

Missed payments are typically not reported to the credit bureaus until they’re at least 30 days late, so your score won’t be impacted until after that time. Your score will be hurt by a payment that’s more than 30 days late, but a delinquency, referring to a payment that is over 30 days late – 60, 90, or even 180 days – can devastate your score.

Derogatory marks such as tax liens, charge-offs, collections, foreclosures or bankruptcies have drastic impacts on your credit too, and it may take weeks or months for them to show up on your report. If you’ve experienced any of these, it may take time for your score to change.

Something Fell Off Your Credit Report

Thankfully, missed payments and derogatory marks won’t stay on your credit report forever. The greater the age of those marks on your credit score, the less impact they have, so you may see your score recover over time while your behavior is kept consistent.

Late payments over 30 days will remain on your credit report for seven years, while derogatory marks like bankruptcy can remain on your report for up to 10 years. Over time your score will recover, and once these marks fall off your credit report, you may see an instant boost in score.

There Has Been a Recent Inquiry on Your Report

If you’ve recently applied for a credit card or loan, the lender has probably pulled your credit report. This is considered a hard inquiry, occurring when a lender checks your credit to determine if they want to lend you money. These will temporarily lower your score.

An Account Has Closed

When you pay off a loan, your credit score could be negatively affected. This is because your credit history is shortened, and roughly 10% of your score is based on how old your accounts are. If you’ve paid off a loan in the past few months, you may just now be seeing your score go down.

Your score could be negatively impacted by a closed credit card, too. Not only is your credit history shortened, but your credit limit would also decrease and your credit utilization ratio would be impacted.

Often you’ll be the one authorizing a credit card to close, but card companies can close them without your knowledge. The Equal Credit Opportunity Act allows creditors to close a card due to inactivity, delinquency or default with no notice. If they close an account for any other reason, they only have to give you 30 days’ notice after closing the account, so you could have a closed credit card that you don’t know even know about.

Should You Worry About Changes in Your Credit Score?

Changes in your credit score are completely normal, so there’s no need to worry about small fluctuations! That being said, it’s good to check your credit report at least once a month so you can monitor these changes when they occur.

You may want to take note of large changes in your score as they could be an indication that something bigger is happening – for example, if you have unauthorized accounts opened in your name, or you’ve been a victim of identity theft.

Now What?

The next time your credit score changes, think about the following questions:

  • Have you spent more or less money this month compared to previous months? If so, your credit utilization ratio may have changed.
  • Did you miss a payment in the past few months? If so, you could have a delinquent payment that’s hurting your score.
  • Did a missed payment or derogatory mark from several years ago fall off your credit report? If so, your credit score may be going up.
  • Have you applied for credit? An inquiry may have been placed on your report, which can negatively impact it.
  • Have you recently paid off a loan or closed a credit card? If so, your credit history may have been impacted.

After looking closer, you may find something has changed that could influence your credit score that you weren’t initially aware of. The best way to monitor changes in your score is to check your credit report monthly, so you’re up to date on all the changes that impact your score. Sites like QLCredit allow you to check your credit score and report for free every two weeks!

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This Post Has 12 Comments

  1. I have been doing exactly what you told me, but it seems like my score won’t go up. Since you have access to my report, can you you tell me what I need to do.

    1. Hi Marie:

      Building up your credit score takes time, but we can certainly have someone reach out and go over your individual situation. I’m going to get this over to our client relations team. Thanks!

      Kevin Graham

    1. Hi Linda:

      I see you’ve applied with us. I’m going to have someone reach out and help with any questions you may have.

      Thanks,
      Kevin Graham

  2. I GOT A NOTIFICATION THAT MY CREDIT SCORE HAS DROPPED SO WHEN I CHECKED IT, IT WENT FROM A 760
    ALL THE DOWN TO 617. I AM TOTALLY STUNNED. NOTHING HAS CHANGED THAT I’M AWARE OF. ALL MY BILLS
    ARE PAID ON TIME & NOT MUCH CREDIT CARD DEBT. HOW IS THIS POSSIBLE TO DROP SO MUCH & HAVE NO
    IDEA WHY. PLEASE, PLEASE, PLEASE HELP ME ON THIS!!!! HOW AND IT DROP 143 PTS . THAT’S ABSURD.

    1. Hi Jill:

      That’s definitely a big drop. It’s hard for me to tell you a definitive answer without really digging into your personal financial situation myself, which just isn’t feasible. However, I can tell you that the country as a whole is probably at a bigger risk of identity theft right now given the well-publicized Equifax hack. I’m not saying it happened, but it’s worth looking into. I recommend getting a copy of your credit reports from each credit bureau and looking for absolutely anything you don’t recognize. I would also place a fraud alert with the bureaus immediately. Once you place the alert with one bureau, it’s shared with all the bureaus. That way if someone tries to get credit in your name, you know about it. If you do end up finding something on your report that you don’t recognize, you can file a dispute and work through the steps to correct any issues. I’m sorry I can’t give you a more definitive answer, but I hope this gives you some concrete steps to take.

      Thanks,
      Kevin

  3. I know this post is old, but I was wondering if there was someone to contact about your credit score change? I mean with the recent Equifax hack, one can no longer be sure if their account has been breached until it’s too late. I was wondering if there is some way to check this? I mean I’m 20 years old, I pay all of my bills on time, haven’t applied for any loans or new credit cards, and maintain a healthy spending rate with my current cards and my credit score has only been going up. Just recently, out of nowhere, my credit score drops 26 points, and I’m sitting here wondering if this a red flag to someone having my account information? Possibly taking something out in my name? Should I be worried, or is this something that just…happens?

    1. Hi Quincy:

      We respond on all our posts, new and old. 🙂

      There are a lot of factors that go into your credit score, so it’s really hard to say what might be happening here. I’m going to recommend a couple of things. If you sign up for an account through our friends at QLCredit, you can see an updated version of your VantageScore from TransUnion and it’ll give you ideas as to what’s affecting your score based on the information in the report. These are soft inquiries so they won’t affect your score. You can also get your credit report from each of the three major credit bureaus once per year through AnnualCreditReport.com. You have the option of getting it from all three bureaus at once or spreading them out to you can monitor throughout the year.

      You want to look for any accounts or loans you don’t recognize. That being said, it could be something as simple as utilizing a little more of your credit limit than you usually do. It’s generally recommended to keep your overall credit utilization, or the amount you charge compared to your credit limit, at 30% or less. It shows lenders that you’re not overextending yourself in using your credit. However, there are those times when we charge big-ticket items for the rewards points. It happens, but it can affect your score.

      I hope this helps!

      Thanks,
      Kevin Graham

  4. I just want to thank you for keeping us informed about possible changes on many issues we the public are not aware of. It is sometimes confusing and misleading for us simple folk to determine our best options. I enjoy reading your info. in hope of keeping my affairs up to date. Hey, I know alot, but I don’t know it all! Thanks for the tips, they are always welcomed!

  5. The article says 30 days late payments will stay on your report for 2 years. I had 1 late payment about 4 years ago, and I think I may have been about 35 days late and it’s still on my credit. I thought 7 years was the norm, so where does 2 years come from? Should that have been referring to how long inquiries stay on your report? My understanding is that hard inquiries negatively impact your score for 1 year, and they stay on your report for 2 years. I’ve seen this occur with my own credit, as I had an inquiry from 3/2015 fall off this month. As a side note, beware Comcast/Xfinity. I simply moved my service from a rental to a home I purchased, and I discovered a couple days ago that they did a hard inquiry just for having service at my new house, when they had messed up and setup a 2nd account for me. So be aware that Comcast will do a hard inquiry and not even tell you, if you sign up for their service.

    1. Hi Reggie,

      You are correct, late payments over 30 days will stay on your credit report for 7 years, however they should stop impacting your score after 2 years. I apologize for the confusion, and I appreciate you bringing it to my attention! Similarly, hard inquiries will only stay on your report 2 years.

      Thanks,
      Victoria Slater

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