If you're wondering "why did my credit score drop?" It's a good idea take a look at the credit score and check for red flags. Your score can be negatively affected by missed payments or applications for credit. If you see a recent decrease in your score, you should consider disputing it.
Inquiries by hard copy
Hard inquiries affect your credit score in a few different ways. Depending on how many they are, they will appear on your credit report for up to two years. In addition, they lower your score for a few months to a year. The amount of the effect can vary depending on your credit history, but it can range from 5-10 points. Depending on your credit history, one to two inquiries may not seem significant. But multiple inquiries can make it look more risky for lenders.
Closing a Credit Card
Closing a card with a credit company can have a negative effect on your credit score. This is because your average age of accounts will be lower. In certain instances, you can mitigate the effect by paying off the remaining balances on your other cards. It is possible to make better decisions about closing an existing account by knowing your credit score.
Medical debt
Unpaid medical bills can have an impact on your credit score if you have a long history of medical debt. Thankfully, there are some steps you can take to restore your credit score. First, make sure you determine whether your medical debt is covered under 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. In general, your credit score is not affected by late payments. In these situations, it is possible to contact your creditor and set up a repayment schedule. To avoid missing payments, you can set up automatic payments or reminders. Additionally, it is important to avoid credit card purchases that are excessive. This will increase the credit utilization ratio. This ratio represents 30% of your FICO Score. So, the lower your credit usage ratio, the better your score.
Inaccuracies in Credit Reports
Inaccuracies on credit reports can harm your credit score. You can do this by contacting the credit bureaus online. Expect to wait between 30 and 45 days before you receive a reply. Many disputes can be resolved within two to three weeks.
Identity theft
When someone steals your identity, it can severely affect your credit score. There are many factors that can cause this. One of the most significant factors is your credit utilization ratio. Your credit utilization ratio is a key factor in determining your credit score. If your credit usage exceeds 50%, it could lead to a 100 point drop in your score. Your credit utilization ratio should not exceed 30%. You can repair your credit score by taking steps to correct identity theft.