Liz Weston

Dear Liz: I normally use about 5% of my credit card lines and pay them off every month. I just made a major trip purchase that pushed my month’s usage to 31%. My score dropped from 820 to 708 in one day. I can’t believe that the score dropped so much. I have paid my accounts in full for decades. I immediately paid the current balance instead of waiting for the due date in hopes that the score will return. Hard for me to believe this is so sensitive. Comment please.

Answer: Credit scoring formulas are incredibly sensitive to how much of your available credit you’re using. It doesn’t matter whether you pay your balances in full. What matters is the size of your balance on the day that your credit card issuer reports to the credit bureaus. The balance is often, although not always, what you owe on the statement’s closing date.

The large drop you witnessed could indicate a bigger problem, however, such as a missed payment or a collection showing up on your credit reports.

Visit AnnualCreditReport.com and request free copies of your credit reports from each of the three major credit bureaus. (Be careful here: You should type annualcreditreport.com into your browser’s address bar, because searching for AnnualCreditReport.com can turn up a bunch of look-alike sites that might try to charge you for credit monitoring or other services.)

All this assumes that you were looking at the same type of score from the same credit bureau. If you looked at a FICO 8 from Experian on Day 1 and a VantageScore 3.0 from TransUnion on Day 2, then any “movement” in the scores could be chalked up to a difference in the formulas or the underlying data at the credit bureaus.