The trigger for this decline wasnt poverty or irresponsibility, Im happy to say.
A credit score is meant to tell lenders how likely you are to repay what you borrow.
It can also affect which homes you’re free to rent and the cost of your car insurance.
But that tells me absolutely nothing about how many points my score will drop if Imiss a payment.
What would move the needle, and how much would the needle move?
Some background: My credit history goes back decades.
I dont have a mortgage.
I dont have a car loan.
Ipay off my credit card balancesmonthly, and I havent missed apaymentin years.
I began this test pretty certain that I had no impending transactions that would involve my credit score.
Heres what I learned.
Lesson 1
I have several different credit scores to ruin.
DONTpay upfront to have your credit score fixed.
DONTopen up a new account if youre maxed out on others.
Multiple negative effects generally outweigh the possible benefit of a new account, says Experians Rod Griffin.
DONTexpect that paying off your mortgage or car loan will help your score.
Youre rewarded for recent management of installment accounts, says consultant John Ulzheimer.
DONTclose a credit card once youve paid it off.
DOpay your credit card bills on time, and work to lower your balances.
One reason is that FICO has several different scoring formulas.
The most common is FICO 8, which rates you on a scale from 300 to 850.
Those bureaus collect information from lenders about peoples borrowing and payments but dont calculate scores.
The VantageScore version I began following, drawn from TransUnion, was 811.
Lesson 2
Focus on ranges, not points.
Soon after I first peeked at my scores, my VantageScore dropped 7 points, to 804.
My total debt the credit card bills I had yet to pay had jumped to $3,371.
One of my FICO scores dropped 10 points; another dropped 4.
