Why did my credit score drop by so much?

Last updated on
November 15, 2022
If you see a big drop in your credit score, the first thing to check on is missed payments. Your payment history is one of the biggest factors in your credit score, so if you miss a payment (with Fizz, that’ll be if you miss a payment and don’t make it for more than 30 days), it might take some work to make up for it.

But there are other reasons why your credit score might’ve dropped by a ton that aren’t as much cause for concern.

If you don’t have any missed payments on your credit report, an increase in credit utilization is probably to blame for the drop in your credit score. Credit utilization is the amount of available credit you use. And because your data is reported to credit bureaus once a month, it’s really a snapshot of how much credit you’re using on one day every month. So if you have $300 in available to spend balance and you spend $299 on the day your data is reported, you’ll have a nearly 100% credit utilization rate.

While it might not seem like this should be a bad thing, it is in the eyes of the credit bureaus. A 100% credit utilization rate has the potential to drop your score by a ton. But don’t worry. If your utilization goes back below the recommended 30% next month, your score is likely to pop back up.

Another reason why you might see a big drop in your credit score is if you close old account or pay off old loans. Your credit score is partially determined by the average age of your accounts and the types of credit accounts you have. Getting rid of old ones will hurt your score, but don’t worry too much - paying off credit lines that you do have on time and in full is still the best thing you can do for your score. Other fluctuations are usually just part of the process.