Finances (US)

Why is my credit score down? Learn about your score!

Your credit score can affect your life in many ways, so read on to answer your question: why is my credit score down?

Understand why your credit score is going down!

Why is my credit score down? Learn here! Source: Adobe Stock.
Why is my credit score down? Learn here! Source: Adobe Stock.

You may be wondering: why is my credit score down? It’s frustrating when your score goes down for no reason. You don’t know what you did wrong, and it feels like you can’t do anything about it.

But you don’t need to worry because we’re here to help you understand more about your score and how to maintain it.

Plus, your score can be considered one of the most important numbers in your financial life.

Your score tells lenders how risky you are as a borrower. This way, they can decide if they will give you a loan and at what interest rate.

Also, you can get the best credit cards with higher credit scores. So, read on to learn why your credit score is going down!

zoom of a hand standing beside a house miniature

What credit score do you need to buy a house?

Do you know the minimum credit score to buy a house? Check out the suitable punctuation to achieve your dream and learn how to get there!

You may be wondering why is your credit score down? It can be many things, but we are here to help you find out.

Also, we know that your credit score is one of the most important determining factors when it comes to your overall financial health.

But what to do when your score declines? Keep reading to understand more about your score!

Why do credit scores go down?

Learn why scores go down! Source: Adobe Stock.
Learn why scores go down! Source: Adobe Stock.

Late or missed payments, a change in your credit use rate, a shift in your credit mix, the closure of older accounts, or the opening of new accounts may all affect your credit ratings.

Also, errors in credit reports as a result of human error or theft might result in a drop in credit scores. And you need to learn how to report these errors, so your score is always valid.

If you make any late payments or fail to pay any bill, your score can go down. Also, if you’re only a few days late, it may not be such a big problem.

However, if you really miss the payment of any bill, it can be a problem. Especially credit card bills. Using a credit card can mean lowering or improving your score. It all depends on how you use it.

If you learn how to use a credit card properly, you may not see your credit score going down for a while. This way, you can maintain a healthy financial life with a high and stable score.

There are some things that can be more troublesome for your score. If you ever filed for bankruptcy, you might have a hard time improving your score, for example.

Certain types of lawsuits can also lower your score in significant ways. So, be sure to talk to a lawyer about this before going for a lawsuit.

What are the main factors that affect your score?

Find out what affects your score! Source: Adobe Stock.
Find out what affects your score! Source: Adobe Stock.

There are many things that can affect your credit score. But many people think that there are five main factors that really make a difference.

If you have a high level of debt, your score can definitely go down. Many credit score companies consider debt as 30% of your credit score calculation.

So, if you have a lot of debt, it can be a hard problem to solve. Plus, a low credit score may be adversely affected by a huge quantity of debt or a high balance.

However, the good news is that your credit score will climb quickly as you pay off your debts.

Another important aspect that can really affect your score is payment history. The way you pay your bills can affect at least 35% of your credit score calculation. So, it is important to pay all your bills on time.

Sometimes it doesn’t matter if you never had any debt. Your score can still be low. This happens because the amount of time you use credit is considered to calculate your score.

Also, the amount of times some company performs credit checks can really impact your score calculation. So, you need to be careful when applying for a credit card or loan. This way, you won’t lower your score.

Can my score go down for no reason?

Sometimes it is not so clear why your score went down. You may have paid all your bills on time, pay off your credit card bills, and done everything right. But even though you do everything right, your score is still low.

Well, if your score went down just in a low variation, it is no problem. Your score can go down a little and go up a little over time. And this can be totally normal.

Some companies have different ways of determining your score. This way, they may have slightly different factors to consider when calculating your score. And that’s ok.

However, if your credit score went down and had a big difference, you should worry about what happened.

You may be only using your credit card a bit more than usual. This can drop your score in some cases due to the calculation of your credit utilization.

However, maybe there was really an error on your credit score report. If you think this happened, you can check everything again, and if there still seems like something’s wrong, you can debate your score.

So, if you find any errors on your score, you need to go fix them soon. If you wait too long to fix them, you may not be able to resolve your score.

What can you do to maintain your credit score?

There are many things you can do to maintain your score the way it is. Plus, you can do many things to improve your score as well.

As we mentioned, paying your bills on time is the most important step to maintaining a high score. And even if you don’t have a high score, you can keep paying your bills to maintain your score.

You’ll also need to stay below your credit limits when using a credit card. Plus, you should always check your own score to see if there are any errors to report.

If you have a low score, you can still get a credit card that fits your profile. So, read our post below to see a list of the five best cards for a low score!

zoom of a person holding three credit cards

5 best cards for low credit score

See throughout this article the best cards for low credit scores and all information related to them and which area of ​​operation each card is most suitable for.

About the author  /  Victória Lourenço

Victória Lourenço is part of the finance writer team for The Mister Finance website. She is a translator and copywriter, having worked on finance topics for over four years. She has a goal to keep studying finances to help people learn more about how to use their credit cards, make loans, and use other money-related products in a way that they can find a more meaningful and healthy financial life!

Reviewed by  /  Aline Barbosa

Senior Editor

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