In preparation to buy my first house I've started keeping an eye on my (Experian FICO) credit score, and I've been seeing behavior that is very strange. After a year of my credit score only going up each month, in the last two months it has dropped somewhat substantially. While two months ago it was at 711, a month later it was 698, and this month it is 678. The only reports in that time have been my auto loan paid in full (which actually happened in March and just took a while to report), and my credit card limit went up (I use 0 - 10% my limit and pay it top of every month). All my accounts have exceptional history except for my student loans because I missed my first few payments post-college. I have no collection accounts and no bankruptcies and these drops happened before a recent credit inquiry for a mortgage pre-approval so that didn't cause these drops.
I can only guess that either:
- It is dropping because I haven't put anything on my credit card these last couple months (I use it for gas but haven't been driving much), or
- Perhaps it's actually because that auto loan account was closed and ongoing payments are no longer being reported. Though I would think that would have a neutral effect, not a negative one.
- My final guess is that maybe current economic factors are playing a role.
Can anyone knowledgable on this subject make a statement, or educated presumption on what could be causing these drops to my credit score?
Can paying a loan in full or closing an account hurt your credit score just due to the fact that you are making less ongoing payments, even though that is only because you don't owe anyone anything?
Can hits to the economy such as Covid-19 affect your FICO score even if you haven't been missing payments?