If you’re wondering why your credit score is suddenly dropping, there could be a few different reasons. In this blog post, we’ll explore some of the most common reasons for a falling credit score, and what you can do to stop it from happening.
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Check for New Accounts
One of the reasons your credit score may be dropping is because you have opened up too many new lines of credit recently. When you open a new credit card or loan, the creditor will do a hard pull of your credit report, which can temporarily lower your score by a few points. If you have multiple hard inquiries in a short period of time, it can signal to lenders that you’re in financial distress and are more likely to default on your payments.
When you check your credit report for a drop in your score, one of the first things you should look for are new accounts that you didn’t open. If you see any, report them to the credit bureau right away.
If you see a new account on your credit report that you didn’t open, it could be an error or it could be fraud. If you think it’s an error, contact the credit bureau and ask them to investigate. If you think it’s fraud, file a police report and contact your lender or credit card company right away.
Other things that can cause your credit score to drop are late payments, maxed out credit cards, and hard inquiries from lenders. If you see any of these on your credit report, take steps to correct the situation as soon as possible. For example, if you’re behind on your payments, bring them current. If you have maxed out credit cards, start paying down your balances. And if you have hard inquiries on your report, send a dispute letter to the credit bureau asking them to remove them.