You may be asking yourself, "Why has my credit score fallen?" It is a good idea that you take a look through your credit report to identify red flags. Your score can be negatively affected by missed payments or applications for credit. It is worth disputing a recent decline in your score.
Hard inquiries
A few ways hard inquiries can negatively impact your credit score are: First, they show up on your report for two years, depending on how many you have. 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 credit score, only one or two inquiries might be significant. However, multiple inquiries can make lenders more suspicious of you.
Closing a credit card
Your credit score may be negatively affected if you close a credit card. This is because it reduces the average age your accounts. You may be able to reduce the effect by paying off your balances on any other cards. Knowing your credit score, and the reasons for it, will help you make informed decisions about closing a account.
Medical debt
Unpaid medical bills can have an impact on your credit score if you have a long history of medical debt. Thankfully, there are some steps you can take to restore your credit score. First, make sure you determine whether your medical debt is covered under insurance. Find out which procedures are covered by the policy.
Late payments
Paying your bills on time can help you avoid credit card debt. If you miss more than 30 consecutive days of payments, your credit score will drop. You can reach out to your creditor to discuss a repayment plan. 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 makes up 30% of your FICO score. Therefore, the lower your credit utilization, the higher your score.
Inaccuracies with credit reports
Credit report errors can negatively impact your credit score. This can be done online by contacting credit bureaus. To receive a response, they may take up to thirty-five to 45 days. Most disputes can be settled within two weeks.
Identity theft
If someone steals you identity, it can seriously affect your credit score. This can be caused by a number of factors. Credit utilization ratio is one of these most important factors. Your score can drop by 100 points if you use more than half of your credit available to pay your bills. It is important to keep your credit utilization ratio below 30%. If you have recently experienced identity theft, there are several things you can do to repair your credit score.