Maintaining a good credit score is important for every consumer. Your credit score influences whether you get credit lines with lower interest rates, or even get approved at all!
Credit scores can fluctuate by 5-10 points every month and might not be as bad as you think. Below we break down the most common reasons for credit score fluctuations and how you can take back control.
Credit scores that drop by 7, or less points will generally be caused by monthly fluctuation when new data is added and recalculated. The following areas are typical culprits when trying to identify causes of minor fluctuations. Below we analyze the most common reasons for these point drops.
Whenever consumers apply for a line of credit like a credit card, mortgage, or an auto loan the potential lender is likely to conduct a hard inquiry. These will negatively impact your credit score as it indicates an intention to take on more credit obligations. When a lender pulls your credit report to validate your application, this is a “hard inquiry”.
The Debt-to-credit ratio is used to identify how much available credit a consumer has made use of. Avoid using more than 30% of your available credit limit if you want to impress potential lenders. If a credit limit is decreased it may inadvertently raise your credit utilization ratio and will have a similar impact on your debt-to-credit ratio.
If interest rates are increased and your debt might also increase, which will be reflected on your credit report.
Any legal documents that are recorded by the government will be available to the public and used by credit reporting bureaus. Documents like:
Once recorded on public record it will remain that way for at least 7 years.
Your payment history is the overall primary contributor to calculating your credit score. New payments will cause some degree of credit fluctuation. Additionally, payments towards loans, mortgages, or auto loans may contribute to increases in your credit score!
A 7 point drop in your credit score is a common occurrence during month to month fluctuations, but it is still worth reviewing your credit report to verify nothing serious is looming.
The only way to resolve an issue is to identify the cause of it. Consumers will have to review their credit reports and identify the reason for the negative impact before anything can be done to resolve it.
Once the issue is identified, consumers can dispute the errors in an attempt to recover their credit scores. Alternatively, consumers may consult credit repair specialists like Credit Sage to help repair the damage on their credit reports, and potentially raise the consumer's credit score to new heights.
There are various reasons credit scores can be impacted negatively with 7 or more points. Consumers must review their credit reports to identify the reason for this drop occurring.
Consulting credit repair specialists like Credit Sage is FREE. They can help repair the damage to your credit report and ensure your best possible credit score is reflected going forward.
Speak with a live credit specialist for your free consultation, now. We're available for you 24/7