Why did my credit score drop for no reason?

Your credit score may have dropped for what seems like no reason due to errors on your credit report. Negative information like a late-payment or higher credit card balances could have adversely impacted your credit score as well. Even an application for a credit card or loan could cause your score to drop. 

You can check your credit score and find out exactly why it changed for free here at WalletHub. You can also find more tips below.

What You Should Do if Your Credit Score Dropped for No Reason

Review your credit reports for errors – You can dispute errors on your credit report with the three major bureaus – Equifax, Experian, and TransUnion – via phone, mail, or online. The bureaus typically resolve disputes within 30 to 45 days.

Pay past due bills – Your credit score will continue to drop the longer outstanding bills remain unpaid. Satisfying the obligations will not remove the derogatory marks from your report, but the status of the account will change and, in most cases, improve your score.  

Apply for and use a secured card – Because secured credit cards require a deposit, approval odds are relatively high. Simply having an open account in good standing can improve your score, as will using the card and making on-time payments.

Diversify your credit mix – Credit cards and lines of credit are considered revolving accounts, and mortgages or auto loans are installment accounts. Having a mix of account types improves your credit.

Lower your credit utilization – If your credit utilization ratio crosses 30%, your score will likely drop. An ideal ratio is between 1-10% . To lower your utilization, focus on reducing the balance listed on your monthly credit card statement.

Wait for negative information to fall off – Most negative information, like late payments or a collection account, falls off your credit report after seven years. A Chapter 7 bankruptcy is the exception, remaining on your report for up to 10 years. Negative entries will have less of an impact on your score over time.