Your credit score dropped, what could have caused this?
Updated: Jun 15, 2020
Used all of your available credit or went over the credit limit: Once you reach your credit limit or surpass it, you score will drop. You know you should never use more than 30% of your credit limit at any time. Your utilization rate is the average between all of your revolving debt that you have on your credit profile. Be careful of your card limits. Going over the limit may trigger the issuer to close your account due to bad financial management. If its a true emergency , contact them before you pass the limit.
Uh-Oh! You forgot to pay! Has it been a long and stressful month? Did it go by really fast? Did paying your account totally slip you mind? We suggest you double up on reminder if at all possible. Usually in your accounts mobile app you can set reminder for the payment due date, you can set it up to remind you a week or more in advance. Combining that on top of your banking apps ability to remind you as well and then setting up Autopay, you should be good to go. When calling for a goodwill deletion make sure to have all of your information in front of you, the account and what month it was late.
Did you happen to close some old unused accounts? When you think about it, it make logical sense to close an account hat you haven't used in the past year. So, why not close them. Well closing them can hut you score. This can have a significant impact especially if the account is one of the oldest ones in your credit profile. The older the card , then more weight it holds in the amount of point you have due to the age of the account. Your credit history is the average age of all your revolving debt as a whole. You can also cause a drop if you add new accounts or if you are added on as an authorized user of an account that is fairly new.
Woo-Hoo! My car payments are over! No more big loans! You may have had a car note for the past 5 - 6 years. Now that you just made the last payment, it may alter you credit score. Once its paid in full and falls off you r credit report it just may make you score drop some. It was a installment loan for the past 5-6 years. And with it being gone now, it can drop your score 5-15 or more points, just depends where it fell in line with your other accounts in relation to the length of time the account has been open.
Got that NEW CREDIT itch! Each time you apply for credit, an inquiry is generated. It may just affect one of the three bureaus or it could be all three. Applying for too much credit, or too soon, can affect your score and drop it for a few months. Normally we see a drop in the month following a new car purchase or home mortgage qualification. You have to be strategic when applying for credit, do it when you don't need it, and only for what you need. Get pre-qualified by your bank for both a mortgage or an auto loan, that way you only have one inquiry for each.