Why Does My Credit Score Go Up and Down?

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Your credit score is an important number that lenders look at before issuing loans. Landlords may also look at it before approving your tenant application. As a consumer, a credit score’s fluctuations can get frustrating. Consumers want certainty and a better understanding of how to improve their scores. Understanding what influences credit scores will help you understand why your score fluctuates and how to increase yours.

Why does my credit score fluctuate?

The major credit bureaus play a big role in credit score fluctuations. They update your credit score monthly as new information arrives. Credit bureaus don’t update your score at the same time, and some bureaus may receive your latest transactions sooner than others. TransUnion, Equifax and Experian can display small differences when calculating your credit score. 

While it may take time to see your latest transaction impact your score, the major credit bureaus will eventually update your credit score to reflect the latest transactions. Any of these transactions can affect your score.

You have late or missing payments

Late and missing payments will impact your score and stay on your credit report for up to seven years. Payment history makes up 35% of your credit score and is the most important category. Late payments will eventually lower your credit score, but the major credit bureaus won’t update your score in real-time to reflect the late payment.

You recently applied for credit

Applying for credit can increase your cash reserves or help you finance expensive purchases. Mortgages, loans and credit cards are some of the most popular types of credit. Each application will result in a hard inquiry, an event that will reduce your score. A single hard credit inquiry won’t do much damage. You’ll likely only lose a few points on your credit score. Submitting numerous applications can make a deeper dent in your credit score, even if you don’t get approved for credit.

Your credit utilization rate increased

Payment history is the most important credit score category, but credit utilization is a close second. Credit utilization makes up 30% of your score, and you can improve your credit utilization by paying debt and getting higher credit limits. Your credit utilization rate increases when your credit card balance goes up. A higher credit utilization rate can negatively impact your score, especially if it’s above 30%. If you have a $10,000 credit limit, having a credit card balance above $3,000 can put downward pressure on your credit score.

Your credit limit decreased

A reduced credit limit will hurt your credit utilization rate and lower your score. Credit limit changes can happen automatically if credit card issuers detect changes in your income or ability to repay debt. If your credit limit automatically decreased, you should contact your credit card provider to discover what happened. 

You closed a credit card

It’s almost never a good idea to close a credit card. Your older credit cards strengthen your credit history, a component that makes up 15% of your credit score. Closing a credit card will not improve your score. It can only hurt you. It’s better to barely use an old credit card than to close it unless the card has excessive annual fees. Closing a credit card will not let you escape debt on the card. You’ll still have to pay the balance, and it can go to a debt collection agency, something that’s best to avoid.

Your report has inaccurate information

The major credit bureaus do their best to get your latest transactions, but they aren’t perfect. One of the major credit bureaus may have errors on your credit report that impact your score. Your credit report may have missing details about on-time loan payments or leave out one of your credit lines. These inaccuracies can bring your credit score down and create discrepancies across the major credit bureaus. 

Each credit bureau gives you a free credit report every year. You can check your report if you plan on getting a loan soon and check for any errors. Fixing them before applying for a loan can help you secure better terms.

You’ve filed for bankruptcy

Few financial events hurt your credit score as much as filing for bankruptcy. Your credit score can fall 100 to 200 points if you file for bankruptcy, depending on how high it was beforehand. Consumers with 700 credit scores before bankruptcy can see their scores drop by as much as 200 points. People with lower credit won’t see as much of a drop, but they can still expect to lose 100 points or more.

The importance of good credit

A good credit score will take you far in your finances. You will get to borrow higher loan amounts which can impact where you live. Those higher loan amounts will also have lower interest rates, reducing how much you’ll have to pay each month. A good credit score opens more doors and lowers your monthly bills.

What to do if your credit score is down

If your credit score is down, don’t panic. Panicking rarely makes any problem better, but if you want to build your credit score, use the strategies below.

Spend responsibly

Effective spending habits create and solve credit woes. Keeping your expenses to a minimum will make your debt more manageable and reduce the likelihood of late payments.

Monitor your credit report

You should take TransUnion, Equifax and Experian up on their promise to provide a free copy of your credit report every year. Reporting errors on your credit report can help you gain a few points without much effort.

Try to pay off your balance in full

Every dollar on your balance hurts your credit utilization rate and makes debt more difficult to manage. While the minimum payment will get you out of trouble, an unattended credit card balance can rapidly accumulate from the high interest rates.

Minimize your debt

Creditors provide credit limits to ensure people don’t go out of bounds with their spending. These limits are also the denominator for the credit utilization rate. Reducing your debt will help the numerator component of credit utilization. Getting your credit utilization rate below 30% is ideal for improving your score.

Don’t apply for credit you don’t need

Credit cards give you financial leverage. You can make more purchases and improve your credit score with on-time payments. These cards also come with rewards programs that give you points or cashback on every purchase. A credit card is a great resource, but you don’t need many of them to improve your score. Applying for too many credit cards will actually hurt your score since every application triggers a hard credit check. One hard credit check won’t do much to your score, but you can lose several points if you apply for too many cards.

Setting an Uptrend Amid Fluctuations

It’s normal to see your credit score fluctuate but don’t let the daily movements keep you up at night. Focus on what you can do to improve your credit score, such as making on-time payments and trimming your debt. If you perform the right actions, the results will take care of themselves. Creating an uptrend through your efforts will help you qualify for better loans and save more money.


Why does my credit score stay the same?

The major credit bureaus update your credit every month. It can take a while for them to receive your latest transactions and have them show up on your score.

Is it normal for credit scores to fluctuate?

It’s normal for your credit score to periodically fluctuate a few points as credit bureaus receive your latest financial transactions.

Why does my credit score keep going down?

Several factors influence a declining credit score, but most of them stem from late payments and rising credit card debt. Your payment history and credit utilization rate make up 65% of your score when combined.

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