If you're wondering "why did my credit score drop?" It is a good idea for you to review your credit reports and find red flags. Missed payments and applications for new credit can all negatively affect your score. It is worth disputing a recent decline in your score.
Inquiries by hard copy
Hard inquiries affect your credit score in a few different ways. You will see them on your credit report up to two years after they have been filed, depending on how many. Additionally, they can lower your score by a few months to a whole year. The amount of the effect can vary depending on your credit history, but it can range from 5-10 points. Depending upon your situation, just one or two inquiries may not prove significant. However multiple inquiries can make you appear more risky to lenders.
Closing a credit card
Credit score can be affected by closing a credit line. This is because it reduces the average age your accounts. In certain cases, you may be able reduce the effect by repaying the balance on your other cards. It is possible to make better decisions about closing an existing account by knowing your credit score.
Medical debt
Your credit score might have been damaged if there is a history medical debt. There are steps to help you restore your credit rating. First, make sure you determine whether your medical debt is covered under insurance. 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. You will see a decrease in your credit score if you are late on payments for more than 30 calendar days. If you are in such a situation, contact your creditor to work out a repayment program. 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 accounts for 30% of your FICO score, so the lower your credit utilization ratio, the better your score will be.
Credit report inaccuracies
Credit reports that are inaccurate can affect your credit score. If you discover an error in your credit report, make sure to dispute it immediately. This can be done online by contacting credit bureaus. Expect to wait between 30 and 45 days before you receive a reply. Many disputes can be resolved in two weeks.
Identity theft
Credit scores can be seriously affected by someone stealing your identity. It can happen for a variety reasons. Credit utilization ratio is one of these most important factors. If you're using more than 50% of your available credit to make payments, your score could drop by 100 points. Keep your credit utilization ratio under 30%. There are several things you could do to fix your credit score if identity theft has occurred.