Amoray42 wrote:
I am new to the forum and am trying to figure out why my credit score jumps around so much. It will change by as much as 15 points in a single day without any seemingly good reason. For example, due to increases in 3 credit card balances (well within available limits) which are normal purchases (for gasoline and routine monthly expenses which will be paid in full when due as always), my credit score dropped 13 points! Why is this happening? I dropped below 800 which concerns me.
Welcome to the FICO Forums, Amoray42!
One of the largest pieces of the pie that makes up your FICO score is determined by the ratio of your current balances (as reported to the CRAs) to your overall credit limits on revolving accounts (like credit cards). The more of your credit that you use, regardless of the reason and regardless of whether you pay it in full, the higher risk the scoring algortithm deems you.
Most CCs report their balances to the CRAs on a monthly basis, usually on the statement date. You can use your cards and still control the balances that report to the CRAs by paying your balance down (or paying it off completely) before the statement cuts, so that the statement balance is either $0 or a very small amount. By doing so, however, you unfortunately are relinquishing your grace period on new purchases.
Having said all of that, there is no reason to fret going below an 800 FICO. That is a very enviable score, and will still qualify you for the best rates on any type of credit you may want. Anything over 760 or so is just for bragging rights.
Edited to add link to "What's In Your FICO Score" page from myFICO Credit Education tab:
Message Edited by cheddar on
05-27-2008 12:20 PM
