8 Reasons Your Credit Score Dropped and What to Do
While it’s not usual for credit scores to fluctuate a few points from month to month, a larger drop of 20 points or more may indicate a problem that should be investigated right away.
We’ll review eight reasons for a sudden score drop.
You’ve become the victim of identity theft.
This is by far the worst and most serious reason you could see your credit scores plummet. If a thief steals your personal information and takes out a loan or gets a credit card in your name, he or she isn’t likely to pay the bill.
You have an error in your credit reports.
File a dispute with each of the credit bureaus that shows any inaccurate information. Then contact the creditor who reported the error and correct the data with the credit bureaus.
You unintentionally missed a payment due date.
If you check your credit reports and are surprised to see a late payment, act quickly to settle your account. Maybe your payment got lost or damaged in the mail, or there was a glitch with your online bill pay service.
Your credit utilization increased.
What may surprise you about credit utilization is that it can increase even if you haven’t maxed out your credit cards. For instance, if your card issuer cuts your available credit limit, your utilization ratio would go up.
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