Reasons Why Credit Scores Decreases

Have you tried checking your credit scores only to find out that it suddenly went down without you anticipating it? If yes, relax and do not be alarmed because credit scores always change. Once your credit scores decrease, there are several reasons why it happened, and here are some of them: 

There’s wrong information on your credit report 

When there’s inaccuracy in your report, it can be caused by a lender who accidentally reports the wrong details. Moreover, it can be an indication that you’ve become a victim of identity fraud. When you think that you have something in your report that’s inaccurate, you have to dispute the information right away with all 3 credit bureaus. 

You closed a credit card 

If you are considering to close a credit card that you’re not using, you might need to think twice. You should be aware that closing a credit card won’t just grow your utilization ratio, however, it can also minimize your credit history’s length and both of them can really affect your FICO® Score. 

One of your credit limits was reduced 

Just like how maxing out your credit card, you can negatively affect your credit scores and boost your credit utilization ratio if you lower your credit limit. It doesn’t matter if you have shrinking credit limits or you have an increasing balance. What’s important is to pay attention to your credit utilization ratio since it will help you know better about your changing credit score.  

You made a big purchase using a credit card 

 Your credit score can possibly drop easily if you max out your credit card just to purchase a fancy appliance or any large purchase. Depending on the limit that your credit card has, making a major purchase can boost your credit utilization ratio, which is the second of the most vital factor as you calculate your credit scores. If this is increased, it could display to your lenders that you’re not eligible to take on new debt or you’re overextended.  

You just applied for a new credit card, loan or mortgage 

Every time you apply for a new line of credit, the lenders would usually ask for a copy of your credit history to assess your creditworthiness. Every time you consent someone aside from yourself, like lenders, to inspect your credit history, a hard inquiry will be noted of your credit report. As a result, this can possibly impact your score for beyond 2 years.  

You have missed or late payments 

When it comes to your credit score, the most essential part would be your payment history since it accounts for 35 percent of your credit scoring model known as FICO® Score. Even one missed or late payment can affect your credit scores negatively. Because of this, it is really vital to guarantee that you’ll stick to make your payments on the dot. 

If you have any of these problems when it comes to your credit card, do not be afraid because we are here for you as we provide quality Phila Credit Repair services. Contact us to know more.