Are you wondering why my credit score dropped? It is a good idea for you to review your credit reports and find red flags. Your score can be negatively affected by missed payments or applications for credit. Consider disputing any recent decreases in your score.
Requests for hard copies
There are several ways that hard inquiries can affect your credit score. They will show up on you credit report for two years depending on how many of them you have. They can also lower your score for as little as a month to one year. The amount of the effect can vary depending on your credit history, but it can range from 5-10 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
Credit score can be affected by closing a credit line. Because it lowers your average age, this can have an adverse effect on your credit score. In certain instances, you can mitigate the effect by paying off the remaining balances on your other cards. Knowing your credit score, and the reasons for it, will help you make informed decisions about closing a account.
Medical debt
Your credit score might have been damaged if there is a history medical debt. Thankfully, there are some steps you can take to restore your credit score. First, check to see if your insurance covers your medical debt. If so, find out which procedures are covered by your policy.
Late payments
Late payments can hurt your credit score. However, you can avoid them by paying your bills promptly. Generally, your credit score will only go down if you miss payments by more than 30 days. If you are in such a situation, contact your creditor to work out a repayment program. Setting up automatic payments can prevent you from missing your payments. Also, don't make large credit purchases. This will increase your credit utilization ratio. This ratio represents 30% of your FICO Score. So, the lower your credit usage ratio, the better your score.
Credit report inaccuracies
Inaccuracies on credit reports can harm your credit score. You can contact the credit bureaus online. For a response, you should expect to wait for thirty to forty five days. Many disputes can be resolved in two weeks.
Identity theft
Credit scores can be seriously affected by someone stealing your identity. This could be due to a number factors. The most important factor 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. It is vital to keep your credit utilization rate below 30%. There are several things you could do to fix your credit score if identity theft has occurred.