Why Did My Credit Score Drop for No Reason?

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Content Manager

Bethany Hickey is a Content Manager and Writer for Auto Credit Express, CarsDirect, and many other automotive blogs. She's a graduate from the University of Michigan-Flint, with a bachelor’s in English-Writing. 

, Content Manager - June 15, 2020

Did you check your credit score to find that it's lower, and you have no idea why? Well, there’s probably a reason it dropped, and you can find out exactly what that reason was by requesting your credit reports and doing a little digging.

Why Credit Scores Drop

There can be a multitude of reasons why you see a credit score drop, but there are a few common reasons to get you started on your investigation.

Common reasons for a credit score decrease could include:

  • Missing or late payments (by 30 days or more): When it comes to missed or late payments, these can really harm your credit score. This is because payment history makes up 35% of your total FICO score.
  • High credit card balance(s): If you’ve racked up some charges on your credit card(s) recently, this affects your amounts owed, which makes up 30% of your credit score. Credit card balances are typically reported once a month, around the same time, so once you pay them off or down, you can check your credit reports again and see the new balance reflected.
  • A new credit application: If you’ve recently applied for or taken on new credit, like a credit card or auto loan, it lowers your score a little, but only temporarily. New credit affects 10% of your credit score.
  • Closed an account: When you close an account, such as an older credit card you rarely use, it can lower your score a little as well. It could affect your credit utilization ratio (how much you can borrow vs. how much you owe), since closing a line of credit decreases the total amount you have available, which raises your ratio, which can negatively affect your credit score.
  • Something was sent to collections: A collection account on your credit reports can really harm your score, and it's best to immediately address it by contacting the collection agency that now owns the negative account.

Still Not Sure What Happened to Your Credit Score?

If none of those common reasons ring any bells, it’s time to dig deeper into your credit reports. Luckily, you’re allowed to request all three of your credit reports for free, weekly through April 2021 (once every 12 months after that). You can get them here: annualcreditreport.com.

Once you have your reports, look through all three and find the reason for your recent drop in score. If you don’t recognize the activity, you can contact the company or creditor that reported the account to figure out what it is.

If you notice any errors, you can work to remove them. Removing errors from your reports is called disputing, and you can file disputes online through the major credit reporting agencies. Just know that in order to remove an error, you have to prove that it’s inaccurate with documentation.

Looking to Repair Your Credit With a Car Loan?

Luckily, nothing remains on your credit reports forever. Most negative accounts drop off after seven years, and it’s never too late to start repairing your credit.

While adding a new line of credit can temporarily drop your score, an installment loan with on-time payments can really help improve your credit score. If you’re checking up on your credit to prepare for a car loan, let us assist you along the way!

Here at CarsDirect, we match borrowers to bad credit dealerships that work with people in all types of unique credit situations, to help them get the auto financing they need. Fill out our free car loan request form, and we’ll look for a dealer in your area.


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, Content Manager

Bethany Hickey is a Content Manager and Writer for Auto Credit Express, CarsDirect, and many other automotive blogs. She's a graduate from the University of Michigan-Flint, with a bachelor’s in English-Writing. 

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