Why does my FICO score keep on dropping???

Question

I check my FICO score that comes with my Discover card.  I don't understand what's going on.  My FICO score keeps dropping. About 6-7 months ago my score was a 832.  I've had this score for a while.  The following month it dropped down to a 789.  Basically 43 points.  The only thing I could think of was that I had used my Discover card quite a bit that month (3,000 out of the $6000 limit).  But as I always do every month, I paid everything off in one shot. After a couple of months, it went back up to a 801.  This is nowhere close to the 832 I originally had.  I check this month and lo and behold, it's dropped back down to 786.  The only thing that I could of think of out of the ordinary was getting a pre-approval for a loan.  Just a pre-approval. Would this cause it drop back down this much? I don't understand why my FICO score keeps dropping.  Would these 2 things cause it to drop down this much?  I pay my credit cards off in full every single month.  I don't have any other mortgage or loan.  

Answer 1

GiJoe81 wrote:
Thanks for the post. I don't have any debt.  Literally 0. I have a BOA Visa card which has a credit limit of $17,000.  Of that, I have a zero balance. My Discover card has a limit of $6,000.  Back 6-7 months ago, I had charged $3,000 of the $6,000 limit on the Discover card.  I paid everything off in one shot before the due date.  This is the month that my credit score dropped from a 832 down to a 789. For the past 6-7 months I've never charged more than $1,000 on my BOA card and never more than $200-300 on my Discover card.  As mentioned, everything is always paid off in full before the due date. Haven't had any type of revolving debt for the past year. I ran my credit report about 2 months ago (when I did a pre-approval) and under the "Key factors that adversely affected your credit score" it states the following:  Equifax: TIME SINCE MOST RECENT ACCOUNT OPENING IS TOO SHORT.  TOO MANY CONSUMER FINANCE COMPANY ACCOUNTS.  TOO MANY ACCOUNTS WITH BALANCES. Transunion:  TIME SINCE MOST RECENT ACCOUNT OPENING IS TOO SHORT.  INSUFFICIENT LENGTH OF REVOLVING CREDIT HISTORY.  LACK OF RECENT INSTALLMENT LOAN INFORMATION.  INSUFFICIENT LENGTH OF CREDIT HISTORY. What kind of worries me is that it's saying I have too many customer finance company accounts and that the time since most recent account opening is too short.  I don't believe this to be true. I only have a Discover card, BOA visa card, HSBC online savings account, and my checking account. I don't get what's going on First off...You have fantastic credit scores! The problem is that you don't have enough credit cards. You need a MINIMUM of 3 credit cards to be able to achieve the highest scores. Credit cards are the foundation of rock solid high credit scores in the future. Not many people can keep a mortgage open for 20 years but it is relatively easy for most people to keep a credit card open for 20 years. FICO has a number of calculations that are credit card specific and if you don't have at least 3 credit cards there is absolutely no way to "earn" all the points that you are entitled to. A case in point: FICO wants you to use your credit cards and you get points for having one card report a balance that is less that 10% of its credit line. BUT...FICO also doesn't want you to use too much credit so if you have 50% or more of your cards report a balance you get nicked points. By having only 2 credit cards you can't win that battle. I suggest that you app for 2 new credit cards each year until you end up with 5 to 8 quality cards that you can keep open for the rest of your life. Your scores are so high that you will qualify for ANY credit card that you desire. I would suggest that you apply for an AMEX Blue Cash Everyday and a CitiBank Double Cash Back card right now. A year from now pick up 2 more cards. Your scores are fluctuating wildly because of the uneven use of your 2 cards. If you use 1 card you are using 50% of your available cards and that is much too high by FICO standards. Having more credit cards will level your scores out and keep them from jumping around so much.