If you're monitoring your credit score through Experian CreditWorks or another service, you may have noticed your credit score is not a static number. Your credit scores change all the time, usually in small increments, sometimes up if you paid off an account for example, and sometimes down.
Here are five common reasons your credit score may have dropped a few points.
- Late payments are the most important and influential component of your credit score. Even one late payment can cause your score to drop, so do everything you can to ensure you are paying at least the minimum payment on your accounts every month.
- You made a large purchase on a credit card. This may appear like you are maxing out your credit card and spending too close to your credit limit.
- You applied for credit. An application for credit will result in an inquiry on your credit report, which does have a small impact on your credit scores. The impact of inquiries is short, however and you should see your score start to increase then fully recover in about a year.
- One of your credit limits was lowered. If you owe a balance on a credit card and your credit limit is lowered, your credit utilization goes up, and your credit score will go down.
- You closed a credit card. Length of credit history is one of the factors that affect credit scores. So, closing an account that you have had for a long time can shorten your credit history. Unless a credit card is costing you a bunch of money in fees or other costs, it does not hurt to keep it open. Shred the card if you can't resist the temptation of using it.
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You can get more information about how to monitor, protect and manage your credit at experian.com/education. If you have questions, submit them through Experian's Facebook or Twitter with the hashtag, #AskSusie. You can also email me your questions directly at AskSusie@experian.com and I will answer them here.
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