Credit Score Question

I check my credit score monthly through my credit card. I have excellent credit. There has been no unusual activity and my bills have been paid on time as always. This month my score dropped 40 points. Is there some way to find the reason for this? I don't understand.

Parental Unit Parental Unit
Apr '17

Any of your cards have free fico score ? Also myfico.com

skippy skippy
Apr '17

When you say you pay the bill on time- are you paying it off fully each month?

Also- have you made any large purchases lately?


Applied for any cards/loans? Closed any cards?

HappyTeacher HappyTeacher
Apr '17

https://www.creditkarma.com/article/MyScoreDroppedWhy

Maybe closed an old account?

skippy skippy
Apr '17

Are you shopping loans / rates?


I check my Fico score through my credit card for free. I did pay off my car loan, 6 months early. I thought that would make it go up. I pay off all other balances in full each month. And no major purchases.

Parental Unit Parental Unit
Apr '17

The car may have counted against you since the account closed (early payment) especially if it was over 36 - 60 months) question is what do you need the high fico for - any underwriter for a Loan will see that as a positive

skippy skippy
Apr '17

Having the car come off your credit report may have raised your debt-to-credit ratio. If it was your oldest account, and then dropped off, that would also affect the number.


Paying off credit cards in full every month can also effect your credit score. I was told that "you're not demonstrating that you can make monthly payments". In essence, you're not helping your credit score as you're not making installment payments. You DO need a good credit score, as just seeing a payoff might only mean that you sold the car.


Wow....I did not know all this. I thought not keeping a balance would be a positive thing. I paid a little extra each month on the car to finish early. I thought my score would jump up. It's still a good score, but I didn't understand it dropping with one less bill to pay. I don't plan any purchases that my credit score would impact anything. I guess it's just a pride thing. I loved the high number and when I saw it drop....and by 40 points, I was crushed. Thanks for the feedback everyone.

Parental Unit Parental Unit
Apr '17

Silly as it sounds- call your credit card company's and ask for your limits to be raised, even if you don't plan on using any of it.

Also how many cards do you have opened? It might help you to open some more, even if again you don't use them much.

Although your length of credit is a factor- so is total credit limit compared to what you use.

I pay all my credit cards each month. Much of the times I pay each card several times a month just because I am already on the page, transferring points.

If you already are a responsible bill payer- take advantage of the credit card companies offering incentives to most people that they know will end up carrying a balance and generate fees.

I have a lot of cards. I only carry my 'commonly used' cards in my wallet. Currently that is 4 Chase cards- all of which earn points that can be pooled.

Each serves a different purpose. Restaurant, gas station, parking garage, tv bill, internet bill, cell phones, groceries, uber, you name it- give it a chance and you earn yourself a nice vacation for very little effort. You are already spending on stuff- reap the rewards from learning and playing the game.


Depending on your income, having high availability or lots of cards can hurt you as well.


Not from anything I've ever read. I am not in banking- but I have been doing this a long time. If you have documentation of this- beyond internet chatter, I'd like to see it.

I get the risk of 'he could suddenly max out everything and run' - but that is assumed when they look at your past credit and income before ever approving you for a new card or new limit to begin with.

I stand by my initial response- for most people- if you can get a credit increase- and NOT use it- your credit score will rise because of it.

That is the very concept of credit to begin with- can we trust this person.


Having a large amount of credit available did have an impact when I was going for a mortgage. The bank did not like the amount of cards in the portfolio especially the non bank cards like best buy, home depot, Lowe's and the like. That is with a credit score well above average. It did not prevent me from obtaining a mortgage but they were willing to lower 1/8 of a point to show proof of closure on those type of accounts.

CraftBeerBob CraftBeerBob
Apr '17

Manual underwriting and your fico score are two divergent things

skippy skippy
Apr '17

Josh - Credit as a concept is theory when the reality is companies want to make money off you. It's not just if they can trust you to pay money back, it's also whether you're going to take the money in the first place. Scores aren't just based on your payment history, they're based on how much credit you take out vs.your income and vs. your credit limit. The best scores are when you take out the credit, use it, then pay most but not all of it off regularly.


I have a great credit score. Never have a credit card balance. When I sold my house and no longer had any loans and a zero credit card balance, my score dropped a bit.

maja2 maja2
Apr '17

Debt ratio is a large consideration:

1 card with a $2000.00 limit and a $500.00 balance shows a debt ratio of 25%.

5 cards with a total credit limit of $10,000000 and a balance due of $500.00 shows a debt ratio of 5%.

happycamper happycamper
Apr '17

http://www.experian.com/blogs/ask-experian/better-pay-off-credit-card-full-every-month-or-maintain-balance/

Pay it off every month, but don't use a large % of your available credit.

JWolfe75 JWolfe75
Apr '17

I notice credit score is a factor in auto insurance rates too now. My company sends information about my score on my auto renewal paperwork. They also mention too many department store accounts as a negative thing. So should I close the ones I never use anymore? I've had them for a long time. Not sure what that will do.

hktownie hktownie
Apr '17

I've heard that closing the accounts is worse for your credit than leaving them open.

Reading through this though I'm worried that my credit score will drop when my student loans are paid off because they were my first debt (and by far the largest), does anyone know if that is the case? It would be a real bummer because obviously I'm trying to pay them off as soon as possible...

My credit took a hit lately when one of my cards ended its 18 month promotional period and changed the due date on the account without warning from the fifteenth to the first (which had passed already), so I was "late" on my payment. Watch for sneaky practices like that folks!

Katherine Katherine
Apr '17

It is my belief - that since don't have an open credit line and they are never dischargavle student Loans so they don't impact your credit as much when you pay them off. A credit card you have had for 20 years that gets closed due to inactivity impacts it a lot more. Student loans will also remain on the report as satisfied for 10 years which is a net positive

skippy skippy
Apr '17

Good to know, thanks skippy

Katherine Katherine
Apr '17

I closed many unused credit card accounts several years ago. It effected my credit score, but not very dramatically. It rebounded pretty quickly.


I think fair issac is getting better with their analytics but they only know what's reported and banks do that once per month right before the billing cycle closes so if you make a big purchase and pay it off before the billing cycle closes (ergo early) it may get reported as 0 and you don't get credit for utilization - apparently they want to see the ability to utilize no more than 30% of your available credit and pay it off between the time the statement closes and a bill is due - it's a very weird system and you really have to game it to get over 800

skippy skippy
Apr '17

I have been fortunate (I think) to live a life time without thinking about this crap.

Our first mortgage underwritten by owner. Our second mortgage got credit-dinged because my Sears CC sent my bill to someone with my name causing my name to look bad. Didn't matter that had been paying similar mortgage for 7 years. Took 24-hours to rectify.

Early on I really got miffed being worked over in the loan process. I saved some money, put it in a CD, went to bank and demanded my first loan close to prime based on the CD as collateral. That CD later became the down payment on my first house with a good sized loan. Basically said fy to the loan sharks ever since. Just lucky.

I agree with playing cc rewards games but I don't study too much. Have all utility bills auto deduct so excellent online monitoring and control. Have store cards too but usually for infrequent bigger item purchases where signing up gets x% off the first sale. Then I let the card expire so I can get a new discount next time. Not like it fills up my mail box anymore.... But rewards and credit scores are different issues.

I also have some pretty large credit limits, don't see any disadvantage. Note to parents: get those limits WAY up before kids college years if you are paying for college. Want to see some reward points rack up? Wait till you charge tuition. Watch that IOU online for 90 days and then watch the magic as your bank account and cc charges disappear in one swell foop. Now get those gift cards, go out and buy (for free) that yuge screen tv. Helps blunt the pain of not being able to afford take out much less going out :>) anymore.

My take on credit scores --- who cares. I know how much I have, how much I make, and how much I can afford to borrow or spend. If my lender or credit scores says: "stop the bus spanky," that's probably a good thing. Who cares where and why, probably time to reexamine my math as to why I thought I could afford it in the first place. Needless to say after a lifetime of early pay-offs, relatively debt-free existence, a fleet of new cars, a number of houses ---whatever, I am still perplexed at my score every time I look at it. They still seem to have loan issues with me when I think my score should say --- no need to fill out form, here's the money :>)

strangerdanger strangerdanger
Apr '17

Way back in the '60's when we bought our house, there were no "credit scores". When applying for a mortgage, you gave credit references. Unfortunately we didn't have any. We had tried to apply for credit when we got married for our furniture, to establish credit. We were denied because we didn't have any creditors to list. We couldn't get any kind of loan because we didn't owe any money. So we paid cash. We finally found a small privately owned store where we bought a TV and paid almost all of it at the time of purchase, keeping a small balance to pay off just to establish some kind of credit history. When we applied for our mortgage, we used that store as a reference, but it wasn't enough and we were denied because we didn't owe anyone any money. We paid our rent and utility bills on time, but those bills were not acceptable as credit references. My parents then co-signed a car loan for us, but the loan was in my husband's name. Finally we had some credit history and we qualified for our mortgage. It was crazy. You couldn't get credit without any credit history, but you couldn't get credit history because you had no outstanding loans, but you couldn't get a loan because you had no credit history. If not for my parents co-signing for that car loan, I don't know what we would have had to do to qualify for a mortgage.

I know things are different now. My daughter got a credit card when she was in college and had no credit history or job!!

Parental Unit Parental Unit
Apr '17

Unfortunately, for reasons beyond my control, my credit score is very poor right now. I'm trying to repair the damage and appreciate any knowledgeable advice. Recently, one of my store credit cards offered me an increased credit limit. I'm not sure if this would help or hurt my credit rating. If it is increased, would the credit bureaus view that as though I want to spend more money but can't afford to pay cash and am just seeking to go further into debt? Or will it be looked at as though the store credit card company acknowledges that I've been reliable in my payments and capable of handling a larger limit? Is accepting the higher limit advantageous or harmful?

melodee melodee
May '17

To the best of my knowledge, having a high credit limit is a good thing as long as you're not using all of it. It shows that the company trusts you with a high limit. You'll still want to keep your debt under 30% of that limit but you should be good. Mine were raised a significant amount in the last two years and I didn't notice any negative effects on my score.

Katherine Katherine
May '17

But you don't want it 0% utilized from what I read

skippy skippy
May '17

I use Credit Karma. Not only does it give you your score, but also breaks it down to show what areas are more important and where you stand in each category. For example. The areas of high impact and their levels are: Credit Utilization (0-9%, 10-29%, 30-49%, 50-74% and more 75%); Payment history - percentage of on-time payments (100%, 99%, 98%, 97% 4).
An item of medium impact is average age of account (longer than 9 yrs., 7-8 yrs, 5-6 yrs, 2-4 yrs and less than 2 years)
Of low impact is the number and type of accounts (higher number and variety of accounts the better) and number of hard inquiries.

No regrets
May '17

You can do some "what-if" models on there too - agreed. Look what happens if you want to buy a home and pay off all debt and reduce the downpayment - very counter intuitive

skippy skippy
May '17

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