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Why did my credit score change when I didn’t do anything?

5 minutes read

Did your credit score recently drop? Do not worry. Many things influence your score that you might not be aware of. When you see a drop in your credit score, evaluate the following to identify the causes and get back on track:

Credit Utilization Rate

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This rate is calculated with how much credit you have used of the available one. It is recommended that you keep this rate below 30% as it has a significant impact when it comes to building your credit score. If you recently made a big purchase, this might be affecting your credit score because it will elevate your credit utilization rate. Banks and money lenders interpret high credit utilization rates as if you had trouble paying bills or have been dealing with many expenses, which will impact your score negatively.

Derogatory marks

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Derogatory marks reflect a default on a loan payment that could come from bankruptcy, missed payments, collections, repossession, and foreclosure. They will impact your credit score, and they will stay on your reports for around 7-10 years. Although they lower your score heavily, you can get them off by proving them to be mistaken.

Closing an account

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This could impact you both positively and negatively. When you close an account, your available credit goes down, which will lower your credit utilization rate if you have a balance on other accounts. On the other hand, closing accounts with a long payment history will hurt your credit score. When evaluating your profile, banks like to see credits with long payment history.

Now that you know what hurts your credit score, review your credit so that you can identify any changes and take action on them. Remember that you can check your credit score for free at Crediverso.

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Daniel Quiroz

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