{"id":55,"date":"2018-10-11T12:27:58","date_gmt":"2018-10-11T12:27:58","guid":{"rendered":"https:\/\/blog3.indifi.com\/?p=55"},"modified":"2019-08-12T06:43:48","modified_gmt":"2019-08-12T06:43:48","slug":"fix-5-reasons-drop-in-credit-score","status":"publish","type":"post","link":"https:\/\/www.indifi.com\/blog\/fix-5-reasons-drop-in-credit-score\/","title":{"rendered":"5 Reasons Why Your Credit Score May Have Dropped (And Ways To Fix It)"},"content":{"rendered":"\n<div class=\"wp-block-image size-medium wp-image-591\"><figure class=\"alignleft\"><img loading=\"lazy\" decoding=\"async\" width=\"396\" height=\"300\" src=\"https:\/\/blog3.indifi.com\/wp-content\/uploads\/2018\/10\/5-Reasons-why-your-Credit-Score-May-Have-Dropped-And-Ways-to-Fix-It-396x300.png\" alt=\"5 Reasons why your Credit Score May Have Dropped (And Ways to Fix It)\" class=\"wp-image-591\"\/><figcaption><em>5 Reasons why your Credit Score May Have Dropped (And Ways to Fix It)<\/em><\/figcaption><\/figure><\/div>\n\n\n\n<p class=\"wp-block-paragraph\">Picture this: You check your credit score once every six months. Instead, of a steady climb, you\u2019re troubled to see that your score has plummeted. What do you make of it?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If your credit score has taken a dip for seemingly no reason at all. Don\u2019t panic.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This is a common experience and it doesn\u2019t mean that you\u2019ve done something wrong. Several factors contribute to the drop in your credit score.<\/p>\n\n\n\n<div class=\"wp-block-button aligncenter\"><a class=\"wp-block-button__link has-background has-vivid-green-cyan-background-color\" href=\"https:\/\/www.indifi.com\/small-business-loans-india-without-security\">Unsecured Small Business Loans<\/a><\/div>\n\n\n\n<p class=\"wp-block-paragraph\">Let\u2019s take a look at the top reasons why your score may have dropped.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.indifi.com\/blog\/fix-5-reasons-drop-in-credit-score\/#1_Your_Credit_Utilization_Ratio_May_Have_Gone_Up\" >1. Your Credit Utilization Ratio May Have Gone Up<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.indifi.com\/blog\/fix-5-reasons-drop-in-credit-score\/#2_You_May_Have_Missed_One_Or_More_Payments\" >2. You May Have Missed One Or More Payments<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.indifi.com\/blog\/fix-5-reasons-drop-in-credit-score\/#3_A_Negative_Remark_Was_Added_To_Your_Credit_Report\" >3. A Negative Remark Was Added To Your Credit Report<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.indifi.com\/blog\/fix-5-reasons-drop-in-credit-score\/#4_You_Gave_Up_An_Old_Credit_Card\" >4. You Gave Up An Old Credit Card<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.indifi.com\/blog\/fix-5-reasons-drop-in-credit-score\/#5_You_Finished_Payments_For_A_Loan\" >5. You Finished Payments For A Loan<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.indifi.com\/blog\/fix-5-reasons-drop-in-credit-score\/#Bottom_Line\" >Bottom Line<\/a><\/li><\/ul><\/nav><\/div>\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"1_Your_Credit_Utilization_Ratio_May_Have_Gone_Up\"><\/span>1. Your Credit Utilization Ratio May Have Gone Up<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">This ratio refers to how much of your available credit you have used at any time and it accounts for 30% of your credit score. So, if you have a credit limit of 50,000 INR and generate bills up to 45,000 INR every month, your credit utilization ratio is pretty high.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It doesn\u2019t matter if you pay your credit card bills on time. As your ratio is high, your credit score may have fallen down.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>The Fix: <\/strong>Try to increase your available credit limit to keep the ratio down. Alternatively, you can apply for additional credit cards to keep the overall credit ratios down.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"2_You_May_Have_Missed_One_Or_More_Payments\"><\/span>2. You May Have Missed One Or More Payments<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">Making a late payment on your credit card and other loans is a big No. Say, you had gone on a holiday or were tied up in other emergencies and you failed to make a credit payment. When you realize your mistake, the due date is long past. You then roll the payment along with the next one. This causes your credit score to fall.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>The Fix:<\/strong> Set up alerts on your phone or auto debit options for your payments, so that you don\u2019t miss out on any bills.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"3_A_Negative_Remark_Was_Added_To_Your_Credit_Report\"><\/span>3. A Negative Remark Was Added To Your Credit Report<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">If you see a major drop in your credit scores, then it could be because of a derogatory remark. The reasons for this may be:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u25cf Foreclosures<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u25cf Bankruptcies<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u25cf Civil Judgement<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u25cf Tax Liens<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u25cf And, many more<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>The Fix<\/strong>: If you notice any derogatory remark on your credit report, make sure to take corrective action immediately to fix it.<\/p>\n\n\n\n<p class=\"has-text-color has-vivid-green-cyan-color wp-block-paragraph\">Also Read: <a href=\"https:\/\/blog.indifi.com\/boost-credit-score-with-credit-balance\/\">Is It True That You Can Boost Your Credit Score By Having A Credit Balance? Find Out Now. <\/a><\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"4_You_Gave_Up_An_Old_Credit_Card\"><\/span>4. You Gave Up An Old Credit Card<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">Very often, people make this mistake. They assume that by surrendering unused credit cards, they can boost their credit scores. The reality is the opposite of that. Hard to believe? Let us explain.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The age of your credit history plays a crucial role in determining your credit scores. By closing the oldest card, you\u2019re lowering the age of your credit accounts, which in turn causes your scores to fall.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>The Fix:<\/strong> Instead of closing an old credit card, you can ask your credit card provider to upgrade the features on it.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"5_You_Finished_Payments_For_A_Loan\"><\/span>5. You Finished Payments For A Loan<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">While it\u2019s not absolutely necessary, having different types of credits (credit cards, loans) demonstrate your ability to handle credit efficiently. This works in your favor, thereby boosting your scores.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">On the other hand, when you close the only loan that you have availed, it makes you less credit diverse, which impacts your score. Similarly, you also run the risk of lowering your score, if you take several loans at the same time.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>The Fix:<\/strong> Before you close any loans or credit cards, take a look at your credit report to see if it has a fair distribution of credits.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Bottom_Line\"><\/span>Bottom Line<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">As you can see, a surprising number of factors cause your credit scores to fall. To ensure that your scores are consistent, make sure to be disciplined in all your payments, keep your credit utilization rate low and check your credit report for any errors from time to time.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If you run into the bad luck of your loan getting rejected due to the recent dip in your credit scores, then don\u2019t fret. You can approach digital lenders like Indifi who help small businesses with credit, based on their business transactions to meet business fund requirements effectively.<\/p>\n\n\n\n<p class=\"has-text-color has-vivid-green-cyan-color wp-block-paragraph\"><a href=\"https:\/\/www.indifi.com\/collateral-free-business-loans-india\">Apply For Unsecured Loans For Bad Credit<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Picture this: You check your credit score once every six months. Instead, of a steady climb, you\u2019re troubled to see that your score has plummeted. What do you make of it? If your credit score has taken a dip for seemingly no reason at all. Don\u2019t panic. This is a common experience and it doesn\u2019t [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":591,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[141],"tags":[12,55,56,26,13],"class_list":["post-55","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-business-loans","tag-credit-score","tag-credit-scoring","tag-finance","tag-small-business-loans"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/posts\/55","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/comments?post=55"}],"version-history":[{"count":7,"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/posts\/55\/revisions"}],"predecessor-version":[{"id":1828,"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/posts\/55\/revisions\/1828"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/media\/591"}],"wp:attachment":[{"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/media?parent=55"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/categories?post=55"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/tags?post=55"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}