Why did my FICO score fall 9 points in 3 months?

[Anonymous]

I checked my FICO scores on this website on 05/06/10.  On that date, I had an Equifax score of 654.  I checked again today, and it was 645!  I have NOT missed a payment nor paid late on any of my accounts since 2008.  I am currently paying three times the monthly minimum amount on all three credit cards and have done so since 2008.  I did make some purchases recently but did not exceed the credit limit and have not paid late.  This drop in score concerns me greatly because I am going to have to replace my HVAC unit some time within the next three months, and am concerned about getting a loan in the first place and what obscene interest rate I will be charged because of my credit history.  Is it the debt to income ratio thing?, or is there something else in play that I don't see?  This experience has been tremendously upsetting.  I feel like throwing my hands in the air and giving up.  The site tells me if I keep doing what I'm doing, in 3 months my score will be in the 700s, but clearly, that is not the case.  The evidence does not bear this out, and I am already living paycheck to paycheck to get these accounts paid off.  I don't know what else to do. 

[haulingthescoreup]

Hi, welcome to the forums! Sorry it's under such circumstances.

Pull up your score reports (I hope you saved the first batch), go to screen two, and look at the list of negative factors for the earlier reports and for the current ones. Is anything different? Has the order changed?

Then go to the list of your accounts. How many had balances three months ago, and how many have balances now? Are the balances higher? Even if you're paying down your balances, you should know that what's reported is generally the balance that's on your statement, not the balance as of the due date. (This is why many of us pay off our balances before the statements drop.

Check the Credit-at-a-Glance screen and compare the length of credit history, on the right, at the top of the table. Did your overall history get older? And if history/ age of accounts is listed on either the positives or negatives on screen 2, did your average age of accounts (AAoA) change?

If all else fails, print out the older reports and the new ones, and go to work with a yellow highlighter. Match each report up, account by account, and see if anything is different. Make sure that any dates of derogatives haven't changed (= become more recent), or their status hasn't changed.

It can be incredibly frustrating, I know, but the scores are derived from info on the score reports. For the score to change, either up or down, something had to change on the underlying reports.

Let us know what you found!

[kittygal]

Although there is not enough information to say unequivocally why your FICO score dropped, it is important to realize that this is a very fluent system with small ups and downs recorded on a daily basis.

You may be making more than minimum payments, but it truly depends on the amount of available credit used when reported to the CRA  as no prior history is maintained of previous payments.   As long as you continue to make payments on open accounts and do not have any adverse situations arise (ie late payments) you will be doing the best for yourself in maintaining a sound financial foundation.

Keep your utilization as low as possible, PIF before the statement drops and don't overextend in terms of credit available and you will be fine.

Variations of 9 points up or down will occur and trying to determine the exact causes for such variations will only result in a major headache.

Only apply for credit when necessary and use the credit available wisely and the FICO score itself is not so important as knowing you are living within your means/