You might be passive about your purchases, loans, and credits, but all of these can affect your credit score. Now, what is important about maintaining a high credit score? Your credit score affects how companies, brands, and other establishments provide you services like credit cards and loans. If you have a low credit score, there are fewer chances for you to be granted with certain loans and credits even in times of emergency. However, due to bad habits of overspending and hyper-debting, there are people who experience a drop on their credit score. Luckily though, there are many ways on how to combat or repair this and one of which is to hire services from credit restoration companies to solve the problem.
Do not wait until you get a low credit score, and do some interventions when you notice there is a sudden drop in your score. Here, we will share with you some of the reasons why your credit score goes down for you to prevent all of these from happening.
1. You weren’t able to pay something in a month
To maintain a good impression, you need to be able to pay your credits as soon as possible. If you fail to do your responsibility, the loan companies and credits card companies will be able to record your negligence on the credit bureaus that will eventually be reflected in your credit score.
2. You purchased something expensive
This is the perfect time to say live below your means. When you purchase something extremely expensive and your credit amount becomes zero, or if you make a big purchase one month, this will create a negative impact on your credit score even if you pay the balance in full on the due date.
3. You applied for a new credit
Every time you apply for new credit, this will be recorded in your credit report. This is why it is not recommended that you apply, obtain, and use multiple credit cards all at the same time. This record can make up ten percent of the whole impression of the credit score.
4. You closed a credit card (or it has been canceled)
Even if you are not using the credit card, we highly recommend (as what also recommended by the experts) that you do not close a credit card as this will definitely hurt your credit score. Also, the credit card issuers re also capable of closing your cards which will have a big impact on your score.
On the other hand, not closing a credit card and not using it will provide a good impact on your credit scores. So, it is better to let the credit cards be unused than to lose it.
5. You weren’t able to pay a credit
It is very important to pay all of your accounts as soon as possible, as not doing so will significantly hurt your credit score. If you fall behind the payments this will be recorded on your credit scores. Loan companies will use this as a determining factor of whether or not to trust you with another credit card and/or loans. So, it very important to maintain a good impression by paying all your accounts as soon as possible.