Have you ever found yourself checking your credit score lately only to find out that there was a fall in your credit score? This happens to many people who reside in Texas, and truth be told, it can really be quite frustrating not knowing why. Well, here is some good news for you – most times, the fall is because of a few mistakes that are easy to correct once you know what they are. Understanding the main credit score factors is the first step toward turning things around.
You Might Be Using Too Much of Your Available Credit
This is a major cause why people have low credit scores. This means if you spend over 30% of your credit limit, this would signal red lights to the agencies. You don’t need to have a problem with debts for this to happen since you only have to spend excessively on paper. Paying off your balance should be done before your statements close instead of the due date.
Late Payments Hit Harder Than You Think
Just one late payment will cause your credit score to drop significantly. As mentioned, the factor that carries the most weight in the credit scoring system is your payment history, so you don’t want to take it lightly. If you have difficulty keeping track of when payments are due, then consider having autopay set up for your account, even if you’re only doing the minimum amount. Life can get pretty hectic when you’re handling everything Texas can dish out.
Too Many Hard Inquiries at Once
Each time you get approved for a new credit account or loan, there will be one more hard pull on your credit report. This isn’t an issue if there’s just one or two. However, if you’ve made too many applications all at once, it may affect your credit score.
Errors on Your Credit Report Are More Common Than You Would Think
You may find that you have dropped in points because of an error that had nothing to do with you. This could be due to incorrect data being recorded or duplicates of your information, among others. Check out your free credit report and review all details carefully. Should you notice something amiss, you can file a dispute immediately. A secure mobile banking app will keep you up-to-date on your credit status.
How to Actually Stop the Drop
Always pay on time. Do not spend too much. You don’t need to close old accounts if there isn’t a specific reason for doing so. Finally, get your credit report annually. This all is very simple, but requires a bit of persistence.
FAQs
Q: How long does it take for my credit score to recover? It depends on what caused the drop. Minor issues like high utilization can bounce back in a month or two. Late payments take longer, sometimes a year or more.
Q: Does checking my own credit score hurt it? No. Checking your own score is a soft inquiry and does not affect your credit at all.
Q: Should I close credit cards I do not use? Usually not. Closing old cards can lower your available credit and shorten your credit history, both of which can hurt your score.
