Volatility

[pammifflin]

my FICO score goes up and down worse than the stock market. there is no consistency. I'm very aggravated and just pay down $265,000 of debt and my FICO score decreased. something seriously needs to change about this reporting database. It makes absolutely no sense. I spoke to a representative who said oh you wanted me to keep this alone and show that I was in good payment faith you don't think paying down $265,000 in debt is good payment fee? I am seriously

[BrutalBodyShots]

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@pammifflin wrote:

my FICO score goes up and down worse than the stock market. there is no consistency. I'm very aggravated and just pay down $265,000 of debt and my FICO score decreased. something seriously needs to change about this reporting database. It makes absolutely no sense. I spoke to a representative who said oh you wanted me to keep this alone and show that I was in good payment faith you don't think paying down $265,000 in debt is good payment fee? I am seriously

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There's definitely consistency if you follow your credit report data changes (annualcreditreport.com) and how your scores react to them. In time you can become quite good at predicting what sort of score impact various report data changes will yield. The FICO scoring hobbyists on this forum have spent roughly 2 decades doing exactly that, so at this point far more is known than is unknown.

As for why your particular FICO score in question changed, you'd have to disclose what exactly changed on your credit reports. Without knowing more about your overall credit profile, it's not worth speculating at this time.

[Realist]

An analogy I've used in the past is like buying a new vehicle, and the MPG gauge bounces largely up and down until time - eventually solidifies towards your real mpg - with enough time.  Not days, not weeks, not months, not a year, but years and decades.  Credit volatility isn't much different - if you create a scenario that is vastly different than the norm.  One loan, ten loans, one hundred loans paid on and off on time establishes a pattern over time.  One credit card, ten credit cards, 50-100 credit cards paid on and paid off over time, establishes a pattern and shows a pattern of solid  and reliable consistency.  At the end of the day, every lender wants to know if they are going to be paid back, but that's not the only metric within the credit world.  Diversity of loan type, and fortitude in how you manage and pay on existing debt, as well as how you carry debt matter.  Responsible credit management matters, so don't do stupid stuff to change the financial environment and then direct attention to how a score is derived.

Large spikes in repayment matter, as it brings about uncertainty.  It's no different than if someone was holding one (1) million dollars in open credit lines, always to pay off their credit lines every month, and then suddenly they charge up $900,000 dollars to only pay the minimum payment.  That volitility will sink any credit score no matter how strong your portfolio (temp or long term).  In the case of someone that pays off a significant amount of debt, you induce an environment very different than what your score is derived from that moment in time when your score was derived.  You changed the game.  You changed the environment.  You changed the metrics.  You created and introduced uncertainty.

Those that sit on millions of dollars in cash, that also have no credit lines, hold no value in the credit world.  They are merely a ghost, and while this is great to some, it's not always the best path forward.  Those that hold millions in credit lines, hold much more power in what they are able to accomplish.  Most wealthy individuals will tell you that using OPM is the path towards success in life.  There is a significant reason for this that I won't go into here.  That topic is for something else completely.

The system works fine, so long as you understand and operate within the confines of its limitations.