Lauren Smith, WalletHub Staff Writer
Your credit score may have dropped by 45 points because a late payment was listed on your credit report or you became further delinquent on past-due bills. It’s also possible that your credit score fell because your credit card balances increased, causing your credit utilization to rise. An ideal credit utilization ratio is 1-10%.
You can check your credit score and find out exactly why it changed for free at WalletHub. Also, our free simulator shows how your score will likely change due to various actions moving forward, which can help you determine the most efficient way to improve your credit.
Why Your Credit Score May Have Dropped 45 Points
- Missed or late payments
- Unpaid debt sent to collections
- Delinquent account charged-off
- Increased credit utilization
- Inaccurate information on your credit report
- Reduced account diversity
- Closed accounts
If you have good to excellent credit, derogatory marks have a greater impact on your score than if your credit is already poor. Fortunately, in either case, the effect of a negative entry diminishes over time.
You can remove negative information from your credit report if it is inaccurate by filing a dispute with the three major credit bureaus. You can also check your credit report and access personalized credit-improvement tips for free here at WalletHub.
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