What to Do If Your Credit Score Drops

Written By Mary Beth Eastman
Last updated December 8, 2020

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A sudden drop in your credit score can be a major shock. What’s worse, the reasons aren’t always clear. Why did your credit score drop? Is it a real risk? And what can you do about it?

Your FICO credit score is what lenders consider when they’re determining if they should give you a loan, and what rate you should get. However, some lenders may assign you an alternative credit rating, which they may calculate in a different way from your FICO score. When you’re considering if your credit score’s dropped, first double-check that it’s dropped at all!

Some common causes of your credit score dropping may be:

  • A missed or late payment. If you’re late or otherwise delinquent, you’ll see your credit score dip significantly.
  • Closing a credit card account. Part of your score is calculated based on how much of your available credit you are using. Closing an account means you are using more of the credit that’s available to you, so you’ll see your score dip.
  • Applying for multiple lines of credit. When you apply for a line of credit (or are simply comparing options), the lender makes an inquiry on your credit. This inquiry can cause your credit score to dip by a few points.

In all cases, small dips are usual and no cause for concern. Larger decreases are definitely worrisome, and you should look into boosting your credit score as soon as possible.

Unfortunately, there aren’t any quick ways to fix your credit score. Your FICO score is a measurement of your credit history over time, so it can only be built back up over time, and smaller dips will fix up more quickly than larger ones. Here are some simple ways to improve your score:

  • Pay bills on time. Paying bills on time, consistently, is one of the best ways to prevent further damage to your credit score, and give your score a boost. Setting up auto-pay is one of the best ways to stay on track.
  • Pay down your debt. Again, the percentage of your credit you’re using will contribute to your credit score. Paying down your credit card debt lets potential lenders know you’re not a risk.
  • Ask for a credit limit increase, get a new card, or keep cards open. These are easy ways to decrease the percentage of your credit you’re using — without spending money.

Another option: Hire help. If you’re looking for a company to help you improve your score, look for the best credit repair services. They can help you repair your credit repair journey and hold your hand along the way. Companies like Lexington Law Credit Repair, Sky Blue Credit Repair and Credit Saint will help you repair your credit so you can move on with your life.

Your credit score is one of the most precious things you have. If your score dips a little, don’t worry — but if it drops significantly, take the right steps ASAP to get back on track to financial health.

About the Author

Mary Beth Eastman

Mary Beth Eastman serves as the content manager for Simple. Thrifty. Living, where she is dedicated to helping readers use money and credit wisely. Mary Beth believes that access to the right financial information paired with a growth mindset are essential tools for getting out of debt and building wealth. Mary Beth has a degree in Journalism from Bowling Green State University and has focused her 20-year journalism career on putting readers front and center, carefully considering their concerns and presenting information that will help them in their everyday lives. She has won numerous statewide journalism awards. Her writing on personal finance as been featured on numerous websites in addition to Simple. Thrifty. Living, including Huffington Post and Lexington Law blog. Mary Beth resides in Pittsburgh, Pa., with her family and two rescue dogs.

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