MW 'I'm stumped': I put $3,000 on my credit card during a vacation and my credit score plunged. Why is it so volatile?

By Quentin Fottrell

'Doesn't a 30-year history of good credit count for anything?'

"I pay for almost everything with credit cards." (Photo subject is a model.)

Dear Quentin,

I pay for almost everything with credit cards, which I pay in full every month to avoid interest. I have done that for as long as I remember. I use them for convenience and reward points. A couple months ago I ran up maybe $3,000 more than normal because we were on vacation. My credit score went down immediately. It went right back up after I paid that card off. I understand that credit score is based on use of available credit, but I'm stumped as to why it's so volatile.

Doesn't a 30-year history of good credit count for anything?

Liberal Credit-Card User

Related: 'I think we're in a market bubble': I'm 62, retired and want to move my $200K IRA to a money-market account. Am I being too cautious?

You can email The Moneyist with any financial and ethical questions at qfottrell@marketwatch.com. The Moneyist regrets he cannot reply to questions individually.

It's not a judgment on you. Don't take it personally.

Dear Liberal,

Don't take sudden moves in your credit score personally. Your long-term credit score? Yes, take that personally.

If you drop from 800 (considered in the range of an excellent FICO $(FICO)$ Score) to 750 (good) over one purchase, it's not a reflection on you - it's merely based on a report of more unusual spending patterns, like perhaps using up more of your available credit than you would usually. Lenders send their reports to the credit bureaus at different times during the month, so you may have checked your score shortly after one such report.

The agencies - TransUnion (TRU), Equifax $(EFX)$ and Experian - all generate their own reports and credit scores, and they may differ. "Even if you have different accounts with the same lender, those accounts may be updated on different days," says TransUnion. "So, your credit report may be updated multiple times a month, depending on how many accounts you have. Your credit report isn't only updated when information changes on current accounts."

"New accounts or information can be added or removed from your credit report as well," the credit bureau adds. "For instance, if you had to file for bankruptcy or an account went to collections, those can appear on your credit report and impact your credit score. Also, accounts may be removed from your credit report." The three major credit-reporting agencies look at issues like on-time payments, taking on new credit lines and debt-to-credit ratios.

Your credit-utilization ratio

Generally, the less you use your available credit limit, the better it is for your credit score. Most experts recommend keeping your credit-utilization ratio below 30%. "Canceling a card may increase your credit utilization - the proportion you use of your available credit - which can also lower your score," Experian (EXPGY) says. If you have an overall limit of $10,000 and you use $2,500 of it, your credit-utilization ratio is 25%, it notes. If you use $500? That's 50%.

If you have multiple credit cards, some will be more important to your score than others. The older your credit, the better risk you are for lenders, so cancel your newest cards first if you are getting rid of cards. Prioritize canceling cards with hefty annual fees, if you're not using them. "It can be good to show lenders that you can successfully manage multiple credit accounts, as they may see this as evidence that you're a reliable borrower," Experian says.

The main credit bureaus, as I said, calculate their scores differently, so your score would be dinged differently depending on the bureau. For example, a FICO score has five categories: payment history (35%), amounts owed (30%), length of credit history (15%), new credit (10%) and credit mix (10%). Like all credit bureaus, FICO values consumers who stay on top of their finances. You obviously have; you just made larger-than-usual purchases in one month.

The importance of a 3-digit number

The main takeaway from your $3,000 expense: Your credit score is a three-digit number, typically between 300 and 850, designed to represent your credit risk, or the likelihood you will pay your bills on time, according to Equifax. "Credit scores are not fixed numbers," it says. "Credit-card companies, for example, usually report by a recurring date known as the billing cycle or statement date. But the exact day of the month may be different for each provider."

As Debt.org notes, credit bureaus rate your score on the likelihood that you are able to pay off a loan. "And sometimes, they can drive you to distraction because of unpredictability," it adds. "Credit-score fluctuation can be like the weather, changing from day to day or month to month, creating great alarm if there is a dramatic rise or fall. The roller-coaster ride with credit scores can leave you wondering why it happened and what was the cause, especially if it drops."

Limit yourself to a few cards, pay your credit cards every month on time, and keep your credit utilization below 30% of your available balance. Some people define others by their credit score, and even put their score on their dating profiles and/or ask their potential suitors to reveal their scores. Others define people by their home, car, alma mater, profession and fancy holidays - the list goes on. Your credit score changes as your credit behavior changes. It's not a judgement, per se, it's a risk assessment.

Don't overreact to a temporary drop in your score. Leave some energy for when something really bad happens.

Related: 'I don't come from money': I received $1.2 million after a family tragedy. Am I foolish to keep it in a money-market account?

More columns from Quentin Fottrell:

I inherited a $30K trust. My bank says I'll pay $10K in taxes if I cash out. Something is not right.

My mom, 94, is leaving her $1 million estate to me, my brother and his daughter. Is that fair?

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-Quentin Fottrell

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October 18, 2025 11:39 ET (15:39 GMT)

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