Why Do Credit Scores Fluctuate?

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Changing information
Your credit scores are a snapshot in time that changes based on your credit behaviors and the information in your credit reports, which is updated regularly. Credit scores are calculated based on information in your credit reports. That information is updated as new data is reported to credit bureaus by lenders, collection agencies, or other sources.

That data could include balance changes, the opening of new accounts, payments on existing accounts, or closed accounts falling off your credit report after a period of time has expired. If you check one credit score in January and then again in March, for instance, the credit score may have changed based on changes in account activity reported to the three major credit bureaus during that time.

Differences among credit bureaus
While a credit score from one of the three major credit bureaus may rise and fall, you may also see differences in credit scores furnished by the other two credit bureaus. Some lenders and creditors report to the three major credit bureaus, but others may report to only two or none at all. That means information that each credit bureau uses to calculate your credit score may differ. In addition, there are different scoring models used by credit bureaus and by companies to calculate credit scores, so even if your data is the same across the three major credit bureaus, the credit scores may differ.

Payment history
Making payments on credit accounts is a common cause of fluctuation in credit scores, as payment history is typically the largest factor used to calculate credit scores, depending on the credit scoring model used. If you make payments on your credit cards or installment loans, your payment history may be reported to credit bureaus, which may cause changes in credit scores.

Debt-to-credit ratio
Your debt-to-credit ratio is how much of your available credit you’re using, and it also factors into credit scores and may cause credit scores to fluctuate. For instance, if your credit card balances change month to month, and the amount of available credit you’re using changes, you may see fluctuations in credit scores as well. Payments may also impact your debt to credit utilization ratio and may also cause credit scores to change. Your debt to credit ratio takes into account all of your available credit versus the total of all your balances owed.

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