You may be asking yourself, "Why has my credit score fallen?" It's a smart idea to look over your credit report and identify red flags. Negative factors can include missed payments and requests for credit. It is worth disputing a recent decline in your score.
Hard inquiries
Hard inquiries affect your credit score in a few different ways. The first is that they can be seen on your credit report for up two years depending on how many there are. Your score will be affected for anywhere from a few months up to a full year. Your credit health and score will determine the extent of the impact, but it could be as high as ten to fifteen 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
Closing a credit card may have an adverse impact on your credit score. This is because it lowers the average age of your accounts. You can reduce the impact by paying off any balances on other cards in some cases. It is possible to make better decisions about closing an existing account by knowing your credit score.
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, determine if you have insurance that covers medical debt. Find out which procedures you are covered by your insurance policy, if so.
Late payments
Late payments can hurt your credit score. However, you can avoid them by paying your bills promptly. In general, your credit score is not affected by late payments. You can contact your creditor in these cases to set up a repayment plan. To avoid missing payments, you can set up automatic payments or reminders. In addition, avoid making large purchases on credit, as this will increase your 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
Inaccuracies in credit reporting can impact your credit score. 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 within two to three weeks.
Identity theft
Your credit score can be severely affected if someone steals your identity. You can have this effect from a variety of reasons. Credit utilization ratio is one of these most important factors. Your score could be affected if you are using more than 50% credit for payments. Your credit utilization ratio should not exceed 30%. You can repair your credit score by taking steps to correct identity theft.