Lost credit score? Here’s why: Savings Coin brought to you by Coosa Valley Credit Union

When you notice a drop in your credit score, it can certainly raise questions. We all try to pay our bills on time, at the right amount, and to keep our credit usage at a reasonable rate. However, sometimes we can fail, as humans do. No one is perfect, but sometimes it can take its toll on your overall credit score.

If your rate is going down, it’s probably due to something specific. Wondering what’s new? Here are four of the most common reasons your credit score might have dropped.

1. You have late or missing payments

One of the most influential parts of your overall credit score is your payment history. Even a single late or missing payment can negatively impact your credit, so make sure you stay on top of things like due dates and minimum payment amounts.

2. You applied for a loan or a new credit card

So you’ve found a new card that’s right for you! Or maybe you’ve just taken out a loan to finish your dream home renovation. Unfortunately, while these two things can be exciting for you at times, it can be less than exciting for your credit score.

Anytime you allow someone, like a credit card company or a lender, to check your credit report, you might notice an impact on your score called a survey.

3. Your credit usage has increased

Sometimes it’s too easy to charge for a purchase and say “oh, I’ll pay for it later”. Unfortunately, fees like these add up quickly. Depending on a card’s credit limit, maxing out the card, making a large purchase, or continuing to use it with small payments can lower your score. You never want to leave a large amount on a card for an extended period of time. Do not hesitate to use your credit card for your purchases, but make sure that the debt related to this card remains low.

4. You have closed a credit card account

Just because you have a card you aren’t using doesn’t mean you have to close it, especially if it’s one of your oldest cards. This will reduce the age of your credit history, which is another element that affects your credit score. The longer you have a card or account open, it shows that you are able to hold onto a credit card over time without establishing high debt. Unless the card has a high annual fee, consider keeping it open to maintain your overall credit limit and credit history.

Hopefully, these four factors will help you determine why your score has gone down or might go down. A strong credit report and credit score are important when working in overall financial health, so work to keep your credit in good shape and health just as you strive to do the same for yourself!



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