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I just checked my credit and it dropped 23 points and can't figure out why

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Score drop

Your credit score is a snap shot of your score at that moment in time.  As such, it can change from day to day.  If you had the two reports side by side, there most certainly would be something that would cause the change and it can be extremely subtle.

There are 5 main factors that impact your score and within each of these categories there are variables as well.

  • Payment History
  • Amount Owed
  • Length of Credit History
  • Taking on More Debt
  • Types of Credit in Use

1. How you pay your bills (35 percent of the score)
This is the most important factor; how you've paid your bills in the past. The strongest emphasis is on recent activity (2 years or less.) Paying all your bills on time is good. Paying them late on a consistent basis is very bad. Few things hurt your score as heavily as past due payments. Having accounts that were sent to collections is even worse. Declaring bankruptcy is worst. Think long and hard before filing for bankruptcy. It most cases, it simply isn't worth it. 

2. Your debt and your available credit (30 percent)

The second most important area is your outstanding debt -- how much money you owe on unsecured and secured loans, (Credit cards, car loans, mortgages, home equity lines, etc.)

Also of importance is the total amount of credit you have available. If you have 10 credit cards that each have $5,000 credit limits, that's $50,000 of available credit. Statistically, people who have a lot of credit available tend to use it, which makes them a less attractive credit risk. 

3. Length of credit history (15 percent)

The third consideration is the length of your credit history. The longer you've had credit -- particularly if it's with the same credit issuers -- the more points you'll get. 

4. Mix of credit (10 percent)

The best scores will have a mix of both revolving credit, such as credit cards, and installment credit, such as mortgages and car loans. "Statistically, consumers with a richer variety of experiences are better credit risks," Watts says. "They know how to handle money." 

5. New credit applications (10 percent)

The final category is how many credit applications you're filling out. The model compensates for people who are rate shopping for the best mortgage or car loan rates. The only time shopping really hurts your score is when you have previous recent credit stumbles, such as late payments or bills sent to collections. 

I would strongly encourage you to speak to a credit expert to review your reports with you in order to provide a plan of action for reaching your credit goals.  Most reliable credit improvement companies will provide a complimentary review of your profiles.  Just be sure to check reviews for any company you decide to contact.

If you need further assistance, feel free to click on my profile for contact info.

hope that helps,


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