A lot of us work towards having a great credit score.  When we have a good score we are offered better interest rates, have a better chance at getting a loan we may need in the future and are often looked at as more financially responsible.  Even though a credit score is just a number, it can really tell a lot about a person.  When ours is low, we have a more difficult time with our finances. 

Like a lot of things, our credit score can fluctuate quite a bit. It can change every year and even monthly.  If you’ve noticed a recent drop in your score, here are a few reasons why it may have lowered.

Why Did My Credit Score Drop?

Late payments:  What really hurts a score is paying your balances late.  This affects it a whole lot and can really lower it if you keep up this bad habit.  If you’ve paid late recently, this is most likely the reason you’ve seen a decrease in your score.  This can be turned around over time, but will hurt your score for the time being.

Added debt:  Have you recently added a great amount of debt to your credit cards?  If so, this can hurt your debt to income ratio.  Adding debt to your account will lower your score so it is best to keep debt to a minimum and to pay everything in cash when possible.

Opened accounts:  If you’ve recently opened another account, you may also see a decrease in your score.  The more accounts you have open, the more debt you can add up.  This looks bad to banks and will ultimately lower your credit score.

There are a few different things that can lower a credit score.  If you’re worried about your score and how it’s recently dropped, these may be a few reasons why it happened.  To give it a boost, avoid doing the above!