My credit score has been on a steady upward rise since I signed up to creditkarma. But when I checked my score recently I saw that it had dropped by 14 points. What could have caused the drop and what can I do to find out more about it and remedy it?

Credit Q&A

Question

My credit score has been on a steady upward rise since I signed up to creditkarma. But when I checked my score recently I saw that it had dropped by 14 points. What could have caused the drop and what can I do to find out more about it and remedy it?

Answer

Without knowing the specifics of your credit report, it is difficult to know the exact cause. Here are a list of things that can affect your credit that are not based on new inquires or a new accounts.

1. Changes in debt. Are you carrying more debt that before? Think about credit card balances, home equity lines of credit, or even mortgages that may have chanced recently.
2. Changes in available credit. These days most banks are lowering credit limits. Is it possible that you missed one of the notices in the mail? Credit cards and home equity lines of credit are top candidates for reductions in available limit. This will often trigger increases in your credit card utilization which could lower your score.
3. Closure of old or inactive accounts. Some credit cards companies are simply closing inactive accounts. To avoid this happening to you, use your cards every couple of months on necessities to discourage overspending.

Those are some speculative reasons. Lastly, remember not to worry about a perfect credit score. If you are in the high 700s, a drop of 14 points won’t hurt your ability to get the best pricing possible.

Filed under: Credit

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