Why is My Credit Score Always Changing?


If someone were to take several pictures of you in one afternoon, would you look exactly the same in all of them? You’re going to look the same for the most part, but there will be some subtle differences in each of the photos. Whether you look at the way your hair, your posture or your clothes look, things are going to change slightly that might change your appearance in a photo.

Your credit score is a lot like an afternoon photo shoot. Your credit score is a snapshot, a single picture of your credit taken at one time.

If you are using your credit cards, your balance is going to always be changing. If the snapshot is taken before you pay your bill, you’ll show a balance. Immediately after, you won’t. If you have a mortgage or car loan, the principal drops every time you make a payment. With every passing month, the length of your credit history grows, and closed accounts carry a little less weight.

In short, credit scores are messier than they may appear. Even when you’re standing still, your credit history isn’t. While the factors above suggest your credit score is a simple mix of five components, it’s computed using a complex, proprietary algorithm whose precise components and weighting are known only to the credit scoring model.

Tags: , , , ,