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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 Rocket HomesSM allow you to check your credit score and report for free every two weeks!

This Post Has 36 Comments

  1. I have three credit cards with a total limit of $23,000. I am prompt in paying my bills in full before the due date. I don’t utilize the cards to a full extent, not even 30%. Does this affect my credit score?

    1. Hi Izzy:

      Anytime you use credit cards at all, it affects your score. It’s also hard to say what your utilization is because all of the credit bureaus update their information different times, but yes, your score is impacted by credit usage. That said, it does sound like you have very good credit habits. So that works in your favor. I hope this helps!

      1. Thank you so much for your response. I have one more question, please? I frequently check my free credit score from Borrowell, Credit Karma, Credit Keeper etc. Will this have a dent on my credit score and report? One card has a limit of 16,000. If I request for a reduced limit of 5,000, how will it reflect on my credit report?

        1. If you get a credit score for the purposes of just checking it from a service, that doesn’t impact your score. The only impacts are from applications for new loans or credit.

          As to the second question, if you request a reduced credit limit, your score will likely go down. The reason for this is that your credit utilization ratio would go up if you keep using the credit card at the same level you currently do. This has the impact of appearing to increase your level of borrowing risk in the eyes of lenders and creditors. I hope this helps!

  2. Hi
    I understand the reasons why a credit score goes down, but I don’t understand why it would go down 8 points because utilization went up from 1% to 5%. No accounts are past due or late or even due until the end of the month. 5% utilization is not a lot, considering the recommendation is 30%. Plus, the balance will be paid by the due date anyway. Please advise. I would appreciate any assistance with clarity. Thanks.

    1. Hi Sonja:

      I agree that 5% is not a lot. However, when your utilization is that low, going from 1% to 5% does represent a change in your habits. These formulas are ultimately just that, formulas. They’re not perfect, and they don’t make the same decisions a human would if they were to look at that. That’s about the best I can tell you because the credit bureaus don’t make the full details of their formulas public to anyone. I’m sorry I can’t be more helpful

  3. I check my credit report every week since I’ve been working on my credit, so I’m fully aware of what is on it. My credit score dropped 4 points recently, and there is absolutely nothing new at all. My credit utilization ratio is at 28% and has been that way for months. I don’t use my cards so there is no change there. All I do is make payments on them which decreases my balance so that shouldn’t drop my score. There are no inquiries, and it even shows that my overall balances have dropped each month. So why in the world would my score drop 4 points and nothing, and I do mean nothing has changed except decreasing my balances by paying my bills. That’s just crazy

    1. Hi Taneeka:

      Four points isn’t a huge drop, but I absolutely understand. If you use the correct credit monitoring service, it should give you some insight into why your credit score might drop if you sign up for Rocket HQ, you’ll get your free credit score and report once per week and it will tell you why your score goes up or down. It’s a VantageScore 3.0 report from TransUnion. The only thing I can think of is that sometimes not charging at least something to your cards and having them be totally inactive could have an effect on your score. But whatever service you use should at least give you some insight.

  4. I just noticed that my credit score dropped 103 points and nothing has been closed or changed. The score drop was only on my Transunion. I have a delinquent medical bill that’s over 2 years old that’s still on my credit report. Would the Medical bill keep dropping my score even though its been on my credit report for over 2 years?

    1. Hi Anthony:

      What’s odd is that you’re just noticing this recently. An unpaid medical bill doesn’t impact your score for up to 7 years, but the effect fades the more time there’s been since the delinquency. It’s also odd that it’s just TransUnion. I would further scrutinize that report if I were you. It should have some effect for all the credit bureaus.

  5. This did not cover the title which was why the drop when no new changes? Is it not something that can be answered? We already know all the reasons it can go down when there is any change even a small one, but what if no new changess, meaning all payment made no new creit…. no anything NO CHANGES but 23 point drop from last month.

    1. Hi Brandy:

      That’s kind of the point. Regardless of whether you were the source of it or not, something had to change that would cause a 23-point drop in your score. If you’re unsure what it is, I would do a deep dive on all your credit reports. You can get your TransUnion® report for free every week from Rocket HQ℠. Beyond that, you’re allowed to request your credit report for free once a year from AnnualCreditReport.com for all three major bureaus per federal law. Depending on how much credit you have, even one big purchase on a credit card that’s paid off can change your score based on your credit utilization depending on the timing of when they pull the reports, but it wouldn’t change without anything happening. That doesn’t happen, so the aim of this post is to give people ideas based on what they might not be thinking about. I hope this helps!

  6. Credit score dropped from 821 to 794 for absolutely no reason. All credit cards have zero balances, mortgage being paid off like clockwork, car lease balance going down every month. No new enquiries, no new debt.

    Credit reports are frozen at all 3 agencies.

    What’s going on?

    1. Hi SuperSoul:

      That is weird. The only thing I think I can tell you is to check your credit and see if there is anything new that could potentially be showing up on the report that you’ve either forgotten about or shouldn’t be there altogether. Rocket HQ will let you see your credit report once a week and it breaks down the information for you. You can also get your credit report from all three bureaus once a year at AnnualCreditReport.com. It might be worth checking out to make sure nothing funky is going on. You obviously have a really great credit score, so it makes sense to protect it.

      1. Thanks for your advice and kind comments. I will definitely follow your suggestions and dig into this deeper. I know scores often fluctuate on a monthly basis by up to five points or so but the worst part is that I have fallen right through the top category to next one down. Oh well…c’est la vie!

  7. my score was 762 last month i charged $ 133.00 on my credit card last month paid balance off this month, checked my score it is now 753 a 11 pint drop for what nothing really changed except i paid off that $133 so i would not have to pay interest on my Card, its crazy that my score would drop 11 points, and i watch all parts of my credit really well, but for the love of pete i cannot figure why a 11 point drop for being responsible and paying your Bills on Time.

    1. Hi L. T.:

      The credit bureaus check your credit at different times of the month, so it could be a coincidence of timing more than anything else. Even if you paid off the bill, if they check your credit before the bill was paid it would show you having a higher credit utilization than normal.

    1. Hi Ronald:

      I’m going to suggest a few things. You can get your free credit score and report through Rocket HQ. This is a VantageScore® 3.0 score and report issued every two weeks from Transunion. This will also give you personalized tips based on the information in your report that could help get your score up. I’m also going to give you this blog post with general credit building tips. Finally, when you have taken these steps, I suggest speaking with one of our Home Loan Experts at (888) 980-6716 and we can help you come up with a personalized game plan. Hope this helps!

  8. If you pay off a loan, credit cards, car loans, or other kind of credit they look at you as a potential success person, and that cant happen or they dont want that happen and their most important allied is CREDIT BUROUS, lets said that you are not a good candidate for them, because you will not pay a high interest or higher fees that let them be more rich an you more poor, otherwise everyone that are able to rich that point and expecting the credit score goes up will be able to get more credit at lower cost, AND THAT IS NOT THEIR REASONS TO DO A BUSINESS,the financial institutes like the people pay higher rates, fees and go on because they will gain more money, thats why they uses any kind of NO UNDERSTANDABLE RULES FOR REGULAR PEOPLES IN ORDER TO GET THE MORE ADVANTAGES AS POSIBLE, and that is not the worse the worse the most is that THE GOVERNMENT IS NOT DOING NOTHING TO OBLIGATE THOSE ROBBERS TO EXPLAIN AND DO A FAIRLY RULES ABOUT THE CREDIT PROCESS BECAUSE THEY ARE PART OF THEIR CLOSED CIRCLE, this is some of the reasons that the credit score inexplicably drop instead of rising as expected, If Im millionair I DONT NEED TO UNDERSTAND OR UTILIZE CREDIT AT ALL !!!! , dont you guys thing soooo!!!

    1. Hi Jose:

      Credit is just one way lenders measure risk for a loan, although it is admittedly important. Lenders have to have some way of judging that risk. Is there something specific we can help you with? We would love to work with you to address your concerns and accomplish your goals. Thanks!

  9. 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

  10. 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

  11. 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 Rocket HQ, 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

      1. My credit score dropped from high 700s to the mid 700s randomly. I got my free credit report, and nothing on there that is new or different. Could charging a 5000 trip on a credit card with a 12,500 limit cause a 40 point drop in my credit? if I pay it off, will the credit score bounce back?
        Otherwise, what else could cause that if I cannot see anything else on my credit report having changed?

        1. Hi Jennifer:

          Depending on how much you charge every month, a $5,000 credit card charge could certainly cause that kind of drop. Assuming nothing else has changed as you say, your credit should bounce back in relatively short order. I hope this helps!

  12. 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!

  13. 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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