8 Reasons Your Credit Score Has Dropped and How You Can Improve It

Did your credit scores drop for no apparent reason? Use these wise tips to boost your scores quickly, so an unexpected credit score dip doesn’t hurt your finances.

What Affects Your Credit Score?

One of the biggest misconceptions about credit is that you only have one credit score, such as FICO. FICO is a popular type of score, hundreds of different credit scoring models are used by mortgage lenders, credit card issuers, insurers, and merchants. There are even multiple types and versions of FICO scores.

8 Reasons Your Credit Score Dropped Suddenly

1. 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.

2. You Have an Error in Your Credit Reports.

Inaccurate late payments, account balances, and available credit limits may be dragging down your scores without you knowing it.

3. You Unintentionally Missed a Payment Due Date.

When you have a record of paying accounts on time, it shows that you’ve been responsible with money. It suggests that your good behavior will continue, and you won’t default on debt in the future.

4. Your Credit Utilization Increased.

The second most important credit score factor is how much debt you owe and your credit utilization.

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