Reasons Why Your Credit Score Might Be Going Down or Taking A Hit

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Here are some reasons why your credit score might have dropped:

You Are Not Making On-Time Payments: Not making payments on (or before) your monthly due date harms your credit score. Missing payments completely is also a contributing factor to bad credit. It was reported that as of October 2023, the share of borrowers with a 30-day past-due missed payment against their credit accounts was also higher.

You Aren’t Paying Your Statement Balance In Full Each Month: Paying your full statement balance each month is crucial. If you charged $2,000, you should pay $2,000 and always avoid the minimum payment if possible. Paying less than your statement balance will result in interest added to the remaining balance, which compounds and will result in growing debt. Not only that, but your credit score will suffer, too.

Your Credit Utilization Is Too High: Your credit score can take a hit if you use too much of your available credit each month. It’s best practice to use 10% or less of your available credit to maintain a higher credit score. It’s reported that as of October 2023, the average credit card utilization was 35%, up from 33% a year earlier.

Consider the point above to help improve your credit score and get yourself back on the right financial track.