Why did my credit score go down?

General Questions
#1

Other than paying down my car loan principal and being almost a year ahead on it, absolutely nothing else has changed. No new credit cards, no late payments, loans, job loss, etc… Nothing.

Yet over the last 3 months my Trans Union & Equifax scores have gone down 23 points. First they went down 16 points, then a month later they went down 7 more points.

I’m still at an excellent rating but it still baffles me. Not a thing about my economics or credit activity has changed whatsoever. Why would my scores go down? :confused:

#2

Have you pulled an actual credit report to confirm that this is true? Perhaps there is something being reported that you are unaware of.

How are you getting your credit score? I monitor mine through a credit card that reports it on every statement, and it also lists the factors that hurt my score. If it went down, I’d suspect a hint to the reason why might be included in that list.

#3

If you are paying ahead and acquiring no new debt, creditors are less likely to make lots of money off you, right? Isn’t that what the score is supposed to predict for other potential creditors?

#4

I know that paying off a car loan will barely boost credit, if at all, Your credit score maybe could conceivably go down some, they base it on open account, if an account like a loan is closed, you no longer have that line of credit. I remember paying a car off and my score didn’t move, when my car broke down and I bought a new one, my score went up for some reason.

#5

No - I pay all my loans off early and I have a score in the 800s.

As far as pkbites, if you’ve put a lot on your credit cards and your credit snapshot occurs before you pay them off (like, given the time of year, if you’ve bought a lot of Christmas presents, assuming you celebrate Christmas), your debt utilization ratio might have creeped past one of the magic cutoffs. Note I am not saying you were late, just that you have a balance that is currently more than 20/40/whatever percent of your limit.

You mention no new loans, but have any of your loans been paid off, credit cards canceled, etc? That will lower your number of accounts, the age of your accounts, and affect the debt utilization I mentioned earlier.

#6

One thing I forgot - do you have any new credit inquiries on your account? Even if you didn’t get the loan/card/whatever, if someone or several someones pulled your credit recently, that will affect your score.

#7

Another vote for “Hard” inquiries - did you play with anything that might have been a credit application?
The other is roll-offs - an old ‘Good’ record is now past the reporting period, so it no longer gets included in the FICO calculation. I’m betting you had a CC or loan which terminated 10 years ago (whatever the period is).

#8

No - your credit score is a statistical measure of the probability that you will default. As it happens, people with low probabilities of default (higher credit scores) are generally more profitable for lenders. But someone with excellent credit who never carries a balance is less profitable than someone with the same score who’s paying thousands of dollars in interest every month.

And even between two people with the same score who both don’t carry balances, one may push $300 a month through their cards and the other $30,000 a month. No interest charges, but you can bet the bank loves all those interchange fees on that $30k customer.

So credit scores are partially, but not completely, correlated with your potential value to the bank as a customer, and when banks make decisions about things they’ll look at more than just the raw score, starting with all the other information on your report.

#9

Could something have aged off your report?

With a bunch of exceptions, bad stuff is removed from your report after 7 years (10 years for bankruptcies) and good stuff is removed after 10 years.

Might you have closed a credit card 7 to 10 years ago? Paid off another loan?

Many people believe that having too many (within reason) credit cards or lines of credit on your report will hurt your score. In fact, having more credit cards (in good standing) can help your score. Closing an account in good standing can hurt your score.

#10

No. Nothing.

The only change in the last few months is I owe less on my car, and am quite far ahead on the loan. I owe nothing on my 3 credit cards, no late payments on electric bills, etc…

That’s why this is so baffling to me. For about 5 years straight my rating and activity has been pretty much the same. Even when I took a car loan out in April of '14 it didn’t change.

#11

Are you getting your credit score only or your credit report in total? Just having the score is not, IMHO, so helpful without also seeing the factors that went into it. If someone’s taken out a credit card in your name and is racking up charges they never intend on paying, that’s something you need to know about sooner rather than later.

Where are you getting your credit scores from?

#12

Credit Karma. And the reports aren’t showing anything that would cause the score to go down.

My score went from 824 to 801, so my score is still quite good. But I don’t see anything on there that would cause any drop at all.

#13

When you click on Credit Factors (second from the top of the left), which lists the six factors that go into your score, did you have any little red/green triangles next to the values? Those indicate a value that changed in your factors, which would translate to a score difference. For instance, when I checked Credit Karma today (I use it also), I see that my new mortgage finally got reported, which increased my total number of accounts but shot my Age of Credit History down a category, so my credit score went down 14 points (also my credit utilization went up, which is annoying because I paid those credit cards off 2 days ago but the balance was reported 5 days ago).

Apologies if this is something you already knew, just digging for an answer. You do have a very good score as it is (I’m 793 and 812, depending on which score you look at).