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Why Is My Credit Score Going Down?

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The most important factor for obtaining a credit is the credit score. For this reason, people often follow their credit score. People who follow the credit score may be asking themselves ‘Why is my credit score going down‘.

The credit score is made up of many different factors and can therefore change continuously. Even within the day, your credit score may have changed. If the credit score decrease during the day is small, your payment may not have been notified to the credit reporting agency yet, or it may have been reported to only one or two of the three credit reporting agencies. For a credit score decline to be significant, it must have experienced a significant decline.

7 reasons to answer ‘why is my credit score going down’

If you’re experiencing a serious drop in your credit score and are looking for an answer to the question ‘why is my credit score going down’, here are 7 possible reasons;

  • Age of Accounts in Your Credit History
  • Adding Negative Items to Your Credit Report
  • Changes in Revolving Credit Balances
  • Changes in the FICO Formula
  • Applying for New Credit
  • Scorecard Hopping
  • Late Payments

Age of Accounts in Your Credit History;

If you are looking for an answer to the question ‘why is my credit score going down’, the answer may be to age of accounts in your credit history. Your credit score increases as the age of your credit accounts increases. However, if an old account closes and the average credit age decreases, your credit score will decrease.

Adding Negative Items to Your Credit Report;

If you are looking for an answer to the question ‘why is my credit score going down‘, the answer may be to include negative items in your credit report. Any mistake you make without paying attention to the 5 main factors that make up your credit score lowers your credit score. If you haven’t done anything negative to include in your credit report, someone with your credentials may have opened a new account or may have increased your credit usage rate. In such cases, you should immediately notice and discuss this issue with the credit reporting agencies.

Changes in Revolving Credit Balances;

If you are looking for an answer to the question ‘why is my credit score going down‘, the answer may be to changes in revolving credit balances. As you take out a loan or use a credit card, your credit usage rate may increase and may exceed 30%. When calculating loan utilization rate, only general calculation is not made. It is also checked whether each credit or credit card meets this rate. Therefore, even if the total of your credits is less than 30%, if your credit or credit card spend more than 30% that month, your credit score will decrease.

Applying for New Credit;

If you are looking for an answer to the question ‘why is my credit score going down’, the answer may be to applying for new credit. Applying for a new loan will lower your credit score. Your credit score will decrease, especially if you have had a hard credit inquiry.

Changes in the FICO Formula;

If you are looking for an answer to the question ‘why is my credit score going down’, the answer may be to changes in the FICO formula. FICO formulas change periodically. Your credit score may decrease when a new version is applied to your credit file. The same applies to other types of credit points.

Late payment;

If you are looking for an answer to the question ‘why is my credit score going down’, the answer may be to late payment. This is the factor that affects the credit score the most. 35% of the credit score consists of payments. If you delay a payment for 30 days, your credit score will decrease significantly and will be included in your credit reports for 7 years. Even if you do everything right in the process, late payment may cause your credit score to remain low.

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