Drop in credit score.

IUA74

I found out today that my credit score has dropped by 15 points. I have a credit card, which I pay off each month and I have recently paid off my mortgage. The only ‘to do’ I can find on my report is to increase (double) my credit limit, which I don’t want, or need, to do. Any advice on how I could improve my score, or whether there could be some underlying reason for the drop? Thanks in advance! 

la531983

The reason is the score is meaningless. 

cymruchris

IUA74 said:

I found out today that my credit score has dropped by 15 points. I have a credit card, which I pay off each month and I have recently paid off my mortgage. The only ‘to do’ I can find on my report is to increase (double) my credit limit, which I don’t want, or need, to do. Any advice on how I could improve my score, or whether there could be some underlying reason for the drop? Thanks in advance! 

You don't need to do anything. Your score is nothing but a marketing gimmick, and is made up. It's not used by any financial institutions. You've made a change to your history (paid the mortgage off) so that will have an impact on the made up score. It'll likely go back up again in a few months.

Read the sticky post at the top of the forum you've posted in for in-depth details:

https://forums.moneysavingexpert.com/discussion/6450574/what-your-credit-score-really-means-please-read-first-before-posting-about-a-credit-score-issue#latest

x_raphael_xx

It may be something stupid like the fact you paid off your mortgage and no longer have a big debt.
Creditors like to see that you can make regular payments on debts, and if you don't have any, then your score is lower.

When me and my ex were looking for our first mortgage, her score was really bad, as she had never had debt or even a credit card.
Mine was great, as I'd had a history of loans & credit cards I had paid/was paying off. She was proud of never needing to borrow, so this made her angry my score was better than hers

balbs

To put 'credit scores' into perspective I have a paid off mortgage, a good combined income,plenty of savings, always pay off the credit card each month no debts etc etc etc.  A good friend has no savings, is a renter, and has just come off a CCJ.  Result is his credit score is 150 points higher than mine which we have a good laugh about.  As others here rightly say credit scores are just meaningless twaddle designed to be a portal to advertise financial products.

nickkohl

1. You can get an immediate boost by paying the one open credit card with a balance, which has a $500 limit, down from $349 to $140.

2. If you have closed credit card accounts with balances here, pay those balances down. The more you pay them down, the better. With those you might want to try the snowball method:

Pay off smallest balance first, then next smallest, and so on.


3. Any open loans, just pay them on time.

CliveOfIndia

nickkohl said:

Always pay off your credits

No, always pay off your debts.  You should be aiming to build up your credits.

CliveOfIndia

nickkohl said:

1. You can get an immediate boost by paying the one open credit card with a balance, which has a $500 limit, down from $349 to $140.

2. If you have closed credit card accounts with balances here, pay those balances down. The more you pay them down, the better. With those you might want to try the snowball method:

Pay off smallest balance first, then next smallest, and so on.


3. Any open loans, just pay them on time.

There's no need to boost your pretend score - it means nothing here in the UK, unlike your home country of America.  And in terms of paying off debts, it's better to focus on those with the highest APR, not the smallest balance.