Summary
Making every payment on time does not guarantee a stable credit score. Money reports that payment history accounts for only 35% of a FICO score, while factors such as credit utilization, account age, credit mix, and new credit applications make up the rest. A score can drop when credit card balances rise, credit card utilization exceeds recommended levels, lenders conduct hard credit inquiries, or consumers open or close accounts. Even paying off a loan can temporarily lower a score by changing credit mix and average account age. Experts recommend reviewing credit reports regularly, reducing revolving debt, correcting reporting errors, and limiting new credit applications.
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