Why Does Your Credit Score Fluctuate?

Despite paying all your debts on time, your credit score may drop. How Credit Bureaus manage and calculate credit scores is still a mystery. However, there are certain points that can help you understand the major causes of credit score fluctuations. These will help you come up with effective ways to DIY credit repair. Let’s take a look.  

1.    Different Credit Scoring Systems

There are two completely different scoring systems for calculations of credit score: FICO and VantageScore. Your Bureau is entitled to use any as per their convenience and suitability. Initially, FICO (Fair Isaac Corporation) was the only credit score system for all the bureaus. But later on, they unanimously decided to introduce VantageScore. Most credit bureaus use the latter, yet the lenders still cross check creditworthiness through FICO, resulting in fluctuated scores. Acceptance is the only possible solution to this one.

2.    Incomplete Submission of Credit Information

Generally, your credit score is the culmination of information from various participants. If anyone of your creditors forget to inform the bureau regarding payments, your score can drop significantly.

3.    During the Process of Credit Repair

If your credit account is undergoing fast credit repair, it will obviously be prone to fluctuations. There are numerous things that happen to your account during the credit repair process; these may include resolution of disputes, calculation of credit utilization ratio, rechecking of previous histories, etc.

4.    Time and Date You Have Pulled the Credit Report out

Greg Holmes, who has been part of this industry for some time, says that credit score is a dynamic process. Your score is highly dependent on the time and date you request the credit report. The best way is to reserve a particular date for the matter.

5.     High Credit Utilization Ratio

Your debt divided by your credit limit is known as your credit ratio and is crucial in regards to maintaining healthy credit scores. Your credit card debt should be maintained within 30% of the total credit limit. The higher it is in your history, the more your scores will fluctuate from time to time.

6.    Faulty Payment History

If you have been a defaulter when it comes to timely repayments, your scores may be affected adversely. Your credit score is deeply rooted in a positive credit history. Hence, it is crucial for you to maintain one.

7.    Numerous Accounts

If the debtor owns numerous accounts, deviancies in credit score occur. The practice messes up the information and creates a lot of confusions, both for the bureau and the creditors.

 

Want to learn more about how your credit score works? Visit QuickCreditRepair.