Why Did My Credit Score Go Down?

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.  

How to Improve Your Credit Score

Your credit score plays an important aspect in your financial life, as this becomes the determinant that loaners and creditors use if they would grant you credit cards or other things that you need. The higher your score, the more likely that you will be qualified to ow some credit cards and loans for emergencies.  

If your current credit score is not something that gets praise, you are not alone on this. Many people are experiencing low credit scores and this affects them crucially in their purchasing activities, or their life, in general. Fortunately, there are many services such as the St Petersburg FL Credit Repair that are willing to provide their services.  

It is important to address the issues as soon as possible to avoid dragging your score to the extreme limit. We will share to you the following to help you improve your credit scores

1. Pay your bills always on time 

For the lenders, it is important that they know you are reliable when it comes to your credits and debts, and this is why they get information on how you pay your bills. If they found out that you are always late when it comes to your financial agreements and responsibility, this will affect their impression of you.  

You will need to pay all the bills on time including the credit cards, loans, rent, phone bills, utilities, and more. Also, if you are behind any payment that you have, address them as soon as possible to avoid dragging down everything.  

2. Pay your debt and keep your balance as low as possible 

When it comes to credit score calculations, the credit utilization ratio plays an important role. It is obtained from adding all your credit card balances and providing them to the total credit limit. 

The lenders are more likely to see low ratios of 30 percent or less. A low ration induces the impression that you are able to maximize your credit well. You can improve your ration by doing these: 

  • Become an authorized ratio on another person’s account  
  • Paying your debts 
  • Keeping your credits as low as possible 

3. Avoid closing unused credit cards 

Do not close any unused credit cards. In fact, doing so will provide you an edge. It is a smart strategy as closing it may increase your credit utilization ratio. Otherwise, it will remain low. 

4.Dispute and correct some inaccuracies on your credit reports as soon as possible 

It is important that you keep a habit of checking your credit reports at the Experian, Equifax, and TransUnion for any mistakes and errors. This is because of petty errors in your information will create a significant drag on your score. This is why addressing them as soon as possible is an important step in making sure you have a good credit score. 

Other tips that might help you: 

  • Get credit for making utility as well as cell phone payment on time 
  • Avoid applying for new credit cards and just apply whenever it is necessary as this might harm your credit scores.