If you are wondering "Why did my score drop?" It is a good idea for you to review your credit reports and find red flags. Your score can be negatively affected by missed payments or applications for credit. If you see a recent decrease in your score, you should consider disputing it.
Hard inquiries
There are several ways that hard inquiries can affect your credit score. 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. The size of the effect will vary depending on your overall credit health, but it can range anywhere from five to ten 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 your credit card
Closing a credit card may have an adverse impact on your credit score. Because it lowers your average age, this can have an adverse effect on your credit score. You may be able to reduce the effect by paying off your balances on any other cards. You can make informed decisions about closing an account by understanding your credit score and how it will be affected.
Medical debt
Unpaid medical bills can have an impact on your credit score if you have a long history of medical debt. There are steps you could take to rebuild your credit score. First, determine if you have insurance that covers medical debt. 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. Setting up automatic payments can prevent you from missing your payments. You should also avoid large purchases on credit as this can increase your credit utilization. This ratio makes up 30% of your FICO score. Therefore, the lower your credit utilization, the higher your score.
Inaccuracies on credit reports
Inaccuracies in credit reporting can impact your credit score. Online contact is possible with the credit bureaus. It is best to expect a response within thirty to forty-five working days. Many disputes can be resolved in two weeks.
Identity theft
It can have a severe impact on your credit score if you are victim to identity theft. This can be caused by a number of factors. One of the most significant factors is your credit utilization ratio. Your score could be affected if you are using more than 50% credit for payments. Your credit utilization ratio should not exceed 30%. There are many things you can do to improve your credit score if you've been the victim of identity theft.