There are a few reasons why your credit score might change slightly from month to month:
Credit utilization
Credit utilization is determined by measuring your overall credit limit against the amount on your bill at the end of the month. The bigger the balance, the higher your utilization. While utilization is an important factor, it fluctuates from month to month just based on your spending, so it isn’t going to have a long term effect
Tip - pay off your bills more than just once a month to keep your outstanding balance low. With Fizz, your balance is paid off every day.
Average age of accounts
With every passing month, the average age of your credit accounts changes. Even if you open new accounts, nothing can stop the passage of time. Don’t worry about changes that stem from the average age of your credit accounts. There’s not much you can do other than wait for time to pass.
Tip - while it’s true that you can’t speed up time, opening new credit accounts will lower the average age of your accounts and could lower your score. You don’t have to avoid new lines of credit, just be wary of their affect.
Hard inquiries
Typically when applying for new credit accounts, lenders will do a hard pull on your credit so that they can see your full credit profile. Hard pulls like this can hurt your score by a few points.
Tip - know that when you apply for a new line of credit, you’ll probably see changes to your score. At the same time, don’t worry too much. The effects of a hard pull don’t last more than a couple years.
Sam Lipscomb
Author bio
Sam is a Kenyon College alum and is head of content at Fizz. He's been a go to personal finance resource among his peers since getting his first credit card during his sophomore year of college. He hails from Washington, DC, loves all things aviation, and currently lives in Los Angeles.
