Why Does My Credit Score Keep Going Down?

If you’re wondering why your credit score keeps going down, there could be a few different reasons. In this blog post, we’ll explore some of the most common causes so you can take steps to improve your credit score.

Checkout this video:

Check for recent late payments.

One common reason why your credit score may keep going down is because you have recently made a late payment on one or more of your accounts. Even if you have always paid your bills on time in the past, one late payment can cause your score to drop significantly. If you think this might be the problem, check your credit report to see if there are any recent late payments listed. If so, make sure to start paying your bills on time again to avoid further damage to your score.

Check for recent credit inquiries.

One of the most common reasons why your credit score keeps going down is because of recent credit inquiries. If you have applied for multiple credit cards or loans in a short period of time, this will cause your credit score to drop. Each inquiry can lower your credit score by a few points, so it is important to limit the number of inquiries you make.

Inquiries stay on your credit report for two years, but only impact your score for the first year. So, if you have a lot of inquiries that are more than a year old, they will no longer be affecting your score.

If you are shopping around for a loan or credit card, make sure to do all of your research within a 14-day period. This way, all of the inquiries will be grouped together and will only count as one inquiry on your report.

Check your credit utilization.

One of the most common reasons people see their credit score go down is by having a high credit utilization. This is when you’re using up a large portion of your available credit. For example, if you have a credit card with a $5,000 limit, and you’re regularly charging $2,500 to it each month, your credit utilization would be 50%. Utilization levels above 30% can start to drag down your credit score.

There are a few ways to lower your credit utilization:

1) Pay down your balances: If you’re carrying a balance on your credit card, try to pay it down as quickly as possible. Even better, if you can pay off your balance in full each month, that will help keep your utilization low and improve your chances of maintaining a good credit score.

2) Request a higher credit limit: This one can be a bit trickier, as not all issuers will be willing to give you a higher limit without first seeing an increase in income or other positive financial changes. But it’s worth asking about – if they give you a higher limit, that will automatically lower your utilization rate.

3) Use multiple cards: If you have more than one Credit Card, try to spread out your charges across all of them instead of just using one card heavily. This will help keep any one card’s utilization rate low, which will in turn help preserve your overall credit score.

Check for errors on your credit report.

One common reason your credit score might drop is if you suddenly have a lot of hard inquiries on your credit report. … If you see a hard inquiry on your report that you don’t recognize, it could be identity theft (someone applied for a credit card in your name without your knowledge).

Check your credit mix.

One factor that can influence your credit score is your “credit mix.” This refers to the different types of credit you have, such as revolving credit (like credit cards) and installment loans (like auto or student loans). Having a mix of both can improve your score. However, if you have several late payments or maxed-out credit cards, your score will suffer. You can check your credit mix by looking at your credit report.