Jun
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Reasons Behind Fluctuating Credit Scores

June 27, 2014

credit reportDeveloping your credit is a process that takes time and patience, and it is important to keep track of your credit report and credit score to monitor progress. In doing so, you may find that your credit score tends to fluctuate. According to “

Credit FAQs: Why Does My Credit Score Fluctuate?” on the Equifax Finance Blog, fluctuating credit scores is not a completely unordinary experience.

Your credit score can be considered a moving target. It is constantly changing based on changes in your credit behavior and credit report. The information that goes into your credit report is constantly being updated as lenders, collection agencies and public records report new data. As time passes, items on your credit report become less significant, causing less of a negative fluctuation than it had previously.

Changes in your payment history and debt-to-credit ratio can lead to credit score fluctuations as well. With your payment history being the largest factor used to calculate your credit score, changes in payment behavior cause changes in the score. Your debt-to-credit ratio also causes your credit score to fluctuate based on your use of available credit. As you spend a greater percentage of available credit, your score decreases. Alternatively, the more of your debt that you pay off, the more your credit score will increase.

Fluctuation between credit reporting agencies (CRAs) is also a cause for changes in credit score. Creditors do not always report their information to all three CRAs, which makes each agency have a different set of data they use to calculate your score. Each CRA has its own scoring model as well, leading to fluctuations between them.

To learn more about personal finance, credit and insurance, be sure to visit the Equifax Finance Blog.

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