You might be wondering, "Why did my credit score fall?" It is a good idea that you take a look through your credit report to identify red flags. Negative factors can include missed payments and requests for credit. It is worth disputing a recent decline in your score.
For hard inquiries
Hard inquiries affect your credit score in a few different ways. First, they show up on your report for two years, depending on how many you have. They can also lower your score for as little as a month to one year. The impact will depend on your credit score, but can be anywhere between five and ten points. Depending on the situation, one to two inquiries may not be significant. However more inquiries can make your credit profile look less risky.
Closing a credit card
Your credit score may be negatively affected if you close a credit card. Because it lowers your average age, this can have an adverse effect on your credit score. You can reduce the impact by paying off any balances on other cards in some cases. Understanding your credit score and the reasons it will be affected can help you make more informed decisions about closing an account.
Medical debt
Your credit score could have suffered if you have a history with medical debt. There are steps to help you restore your credit rating. First, you should determine if your medical debt is covered by insurance. Find out what procedures are covered under your policy if it is.
Late payments
Late payments hurt your credit score, but they can be avoided by paying off your bills as early as possible. In general, your credit score is not affected by late payments. 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. In addition, avoid making large purchases on credit, as this will increase your credit utilization ratio. This ratio is responsible for 30% of your FICO score. The lower your credit utilization ratio, you will get a better score.
Inaccuracies in credit reports
Inaccuracies in credit reports can hurt your credit score, so if you find an error or inaccuracy on your report, dispute it right away. This can be done online by contacting credit bureaus. To receive a response, they may take up to thirty-five to 45 days. However, most disputes are resolved in two weeks.
Identity theft
Your credit score can be severely affected if someone steals your identity. It can happen for a variety reasons. The most important factor is your credit utilization ratio. Your score can drop by 100 points if you use more than half of your credit available to pay your bills. It is vital to keep your credit utilization rate below 30%. There are many things you can do to improve your credit score if you've been the victim of identity theft.