If you're in the habit of monitoring your credit score often or you signed up for credit score alerts, then you've seen how your credit score changes overtime period. While you're excited about an increase in your credit score, you'd be equally alarmed about a drop.
The credit score calculation is complex and it can be difficult to pinpoint the exact reason for a credit score drop suddenly. Since your credit score is based on information in your credit report, an unexpected decrease in your score can typically be traced to a change to the information in your credit report. And, it doesn't have to be a big change for your credit score to fall. There are a number of items included in your credit score like payment history, re-payment history, Loans, etc.
Here are a few possible reasons your credit score could drop.
#1.Your Payment Was More Than 30 Days Late
Payment history has the most significant impact on your credit score. Credit card and loan repayments more than 30 days past due are reported to the credit bureaus and are reflected in your credit score report. Once the late payment hits your credit report, your credit score will most likely drop. The problem solution is making your repayment on time or if possible then make it before the time so it creates a good impression on your score.
#2. Your Unpaid Account Was Sent to Collection
To protect your credit score, it's important for you to pay all of your accounts, not just your credit cards and loans. If you fall behind on the payments on your non-credit accounts (such as your monthly phone bill), the defaulted balance could be sent to a collection agency and included on your credit report. Once a collection shows up on your credit report, it will almost certainly cause a drop in your credit score.
#3. One of Your Credit Limits Was Lowered
A lower credit limit has the same impact as charging an expensive item. If you have a balance on a credit card with a low credit limit, your credit utilization goes up, and your credit score goes down. You may not have control over whether your credit card issuer reduces your credit limit, but if this happens, paying down your balance can improve your credit utilization and your credit score.
These all the main and major reasons for drops in your credit score then this is the main reason, but there is some other number of reasons behind the drop of your credit score suddenly.
If you are suffering the same problem with your credit score then you need to hire a credit repair company like Credit Repair Ease. You can call on (888) 803-7889 and make your credit score awesome.
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