If you're wondering "why did my credit score drop?" It is a good idea that you take a look through your credit report to identify red flags. Your score can be negatively affected by missed payments or applications for credit. Consider disputing any recent decreases in your score.
Hard inquiries
There are several ways that hard inquiries can affect your credit score. You will see them on your credit report up to two years after they have been filed, depending on how many. They can also lower your score for as little as a month to one year. Your credit health and score will determine the extent of the impact, but it could be as high as ten to fifteen points. Depending on your situation, one or two inquiries may not be significant, but multiple inquiries can make you look more risky to lenders.
Closing your credit card
Closing your credit card could have a negative impact on credit scores. Because it lowers your average age, this can have an adverse effect on your credit score. You can reduce the impact by paying off any balances on other cards in some cases. Knowing your credit score, and the reasons for it, will help you make informed decisions about closing a account.
Medical debt
If you have a history of medical debt, your credit score may have taken a beating because of unpaid medical bills. There are steps you could take to rebuild your credit score. First, you should determine if your medical debt is covered by insurance. Find out what procedures are covered under your policy if it is.
Late payments
Paying your bills on time can help you avoid credit card debt. You will see a decrease in your credit score if you are late on payments for more than 30 calendar days. In these situations, it is possible to contact your creditor and set up a repayment schedule. Automating payments or setting up reminders for payments can help you avoid missing them. Additionally, it is important to avoid credit card purchases that are excessive. This will increase the credit utilization ratio. This ratio makes up 30% of your FICO score. Therefore, the lower your credit utilization, the higher your score.
Credit report inaccuracies
Inaccuracies in credit reports can hurt your credit score, so if you find an error or inaccuracy on your report, dispute it right away. You can reach the credit bureaus online. To receive a response, they may take up to thirty-five to 45 days. Many disputes can be resolved in two weeks.
Identity theft
If someone steals you identity, it can seriously affect your credit score. This can be caused by a number of factors. Your credit utilization ratio is one of the most important factors. Your score may drop 100 points if your credit utilization ratio exceeds 50%. Credit utilization should be below 30%. If you have recently experienced identity theft, there are several things you can do to repair your credit score.