Credit Score drops after consistent on-time payments?

Question

Any thoughts? Last week my credit score dropped over 50 points and I have not taken out any new credit, AND i have made every payment on time for the last year.
Any help would be appreciated...... struggling to understand!

Answer 1

Have the balances on your existing accounts increased? That is one factor in determining your credit score. Also, if your credit cards have made increases in your credit limits that too could cause your score to drop. You have the ability to now use that credit and it is a risk factor that creditors take into account.

There is a delicate balance between too much and too little credit.

Answer 2

First of all, can you trust the source your credit report came from. Second, if you can, pay your bills as soon as they come in the mail. Don't wait until 2 or 3 days left to pay the bill, credit card companies start new billing cycles, and yours may still be late getting to the company. Last, call your credit card companies up and ask them what date they posted your payment. The dates may cross over and that may be why your credit score has dropped.

Answer 3

Without seeing your credit report, I can say that the most typical reason would be you are using a large portion of your available credit on your open accounts. As a financial adviser I recommend that clients keep their credit card balances at no higher than 25-30% of their available credit limits. If this requires you to move your balances around to meet this criteria you should do so even if it means opening another high limit card and moving 25% to that card. Another thing to check is, on your credit report is the credit card company reporting your highest credit you've used on your card or your credit limit. The ones that report the "high" number is detrimental to your credit report. If that is the case, you may want to call them and ask them to change that (whatever helps getting to the 25-33% ratio) and if that's not possible charge a higher amount on your card then reduce it to 25% of the highest balance used to get a higher credit score.

Answer 4

It's hard to say without knowing if you have checked your reports for any negative reporting, seeing if someone has been pulling your credit through hard inquirys, how much of a balance you have on that account compared to your credit limit etc.

Also, if you are getting your scores from anywhere but myfico, they are not true scores. The fake scores can vary widely as much as 100 points (more or less) from the true myfico scores. (even the scores that you get from each credit bureau are considered fake scores)