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  • Writer's pictureTynisha Sanders

Have you ever had your Credit Score Fluctuate but didn’t know why?

Have you ever had your credit score fluctuate but weren’t sure why? Here are six things to avoid if you don’t want your score to drop:

1. Applying for new credit. Each time you apply for a new credit card, a personal loan, car loan, mortgage, etc. a hard inquiry is recorded on your credit report and could slightly impact your score. Inquiries last on your credit report for up to 2 years so only apply for credit if you need it.

2. Maxing out your credit cards. Maxing out your credit cards could definitely cause your credit score to drop. You should keep your credit utilization ratio below 30%. For example, if you have a $1,000 credit limit, don’t spend more than $300.

3. Late payments. 35% of your credit score is determined by your ability to make payments on time. That’s a pretty hefty percentage! So you can see how this would have a significant impact on your credit score. Therefore, it’s very important that you make all of your payments on time. Late payments lower your score, however, paying on time increases your credit score.

4. Closing a credit card. You may think closing a credit card you don’t use is a good idea but it’s actually not. Closing a credit card will increase your utilization ratio and decrease the length of your credit history, both of which can cause your score to drop.

5. Your credit limit decreased. Did you know that credit card companies can lower your credit limit if you don’t use the card enough or if you miss too many payments? Since decreasing your credit limit raises your utilization and lowers your score, it’s in your best interest to use at least 10% and pay it off before the due date to avoid paying interest.

6. Foreclosures and/or bankruptcies. Either of these can cause a tremendous amount of damage to your credit score and both can disqualify you from getting approved for credit in the future. A foreclosure will stay on your credit report for up to seven years & bankruptcy up to ten years.

Written by Tynisha Sanders


IG @thesbplug

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