Your credit score is used by potential lenders to evaluate whether they feel you’re creditworthy. If you’ve noticed your credit score going down, there are several things that could have caused this, and most of them you can work on to improve your score. Here are the top ten things that could be driving your credit score down:
- Have There Been Any Late Payments?
If you’re having financial problems and couldn’t make a payment or simply forgot to pay a bill, it’s going to affect your credit if it was more than 30 days late. For a healthy credit score, it’s important to always pay your bills on time.
- A Negative Item Has Been Reported
A negative item such as a bankruptcy or an account going into collections can quickly cause your score to go down.
- Credit Utilization Has Increased
A rule of thumb is you should try to use no more than 30 percent of your available credit. If your credit utilization has increased, your credit score may take a hit.
- Too Many Inquiries
If there are too many inquiries for new credit in a short amount of time, it can appear that you’re becoming desperate to borrow money, and this can have a negative impact on your credit score.
- A Credit Limit Decrease
One factor that goes into your credit score is the amount you owe relative to the amount you have available to borrow. If the limit on one of your credit lines decreases, you have less money available to borrow.
- Closed a Credit Card Account
It might seem that you should close a credit card account that you aren’t using. If you do, it can actually hurt your credit because the amount you owe compared to the amount that you’re able to borrow is now a higher percentage.
- An Old Account Was Closed
A factor in your credit score is the length of your credit history, so if you pay off the oldest account you have, it may impact your score.
- Cosigned for Someone Else
Did someone recently ask you to cosign a loan for them? While you might not think of that loan as yours, it’s still going to show up as additional debt on your credit report.
- You’ve Been a Victim of Identity Theft
A sudden drop in your credit score when none of the above reasons apply to you could be a sign that you may have been a victim of identity theft. This means someone else could be using your personal information to open new credit card accounts or to take out loans.
- Errors on Your Credit Report
Another possibility is that the information on your credit report isn’t accurate. Loans that have been paid off could be showing as still open or loans that you have open could be showing up twice. Or, payments may have been inaccurately reported as past due even though they were paid on time.
It’s always a good idea to take a proactive approach to your credit. Dovly makes this process easy with our automated credit repair engine. If items on your credit report need to be disputed, we take care of it for you while you relax and watch your credit score go up. Get started taking charge of your credit with Dovly’s help today!