This question was asked by one of the non-US residents who follow the ramblings of the insane American woman. ;-)
Okay, I am by far no expert on this, but this is my take on a FICO score. Every American is judged by their spending habits. If you have loans and use credit cards and always pay on time, you are judged highly by the governing credit agencies, thus a high FICO score. If you use cash and never ever take out loans or use credit cards, you might think you would gain some respect for that, but alas you have nothing for the credit agencies to base your performance on, so you have a low or non-existent FICO score. If you have had credit but have experienced a few bumps in the road (i.e., divorce, missed a credit card or loan payment, etc.), your FICO score hits the skids.
Having a high FICO score means low interest rates on any loan. A low score means OUTRAGEOUS interest rates.
After my divorce my credit score hit the skids. However, I decided last year that I wanted to get a house, and with my FICO score in the sad shape it was in, it was unlikely I would be able to get a decent mortgage, so I have spent the last year trying to clean my credit up, and I was succeeding. I was just a hair away from being in the "good risk" score category. With the 52 point drop though, I am back to the "fair to poor risk" category.
Other than investigating why the drop, getting the score back up where it was is not going to be an easy task because the credit agencies feed off of our discomfort. They wallow in our misery. They laugh at our pain.