{"id":11041,"date":"2024-08-27T13:11:19","date_gmt":"2024-08-27T13:11:19","guid":{"rendered":"https:\/\/lxme.in\/?p=11041"},"modified":"2025-04-28T13:11:17","modified_gmt":"2025-04-28T13:11:17","slug":"why-did-my-credit-score-drop","status":"publish","type":"post","link":"https:\/\/lxme.in\/v1\/why-did-my-credit-score-drop\/","title":{"rendered":"Why Did My Credit Score Drop?"},"content":{"rendered":"\n<p><strong>Aditi:<\/strong> Hey Meera, I just checked my credit score, and it is dropped! I&#8217;m so confused, what might have happened?<\/p>\n\n\n\n<p><strong>Meera:<\/strong> Oh!! There are a many of reasons this could happen, even if you think everything&#8217;s fine.<\/p>\n\n\n\n<p><strong>Aditi:<\/strong> Can you please tell me what all can affect my credit score?<\/p>\n\n\n\n<p><strong>Meera:<\/strong> Sure, Read this blog by LXME it will give the detailed understanding on the same.<\/p>\n\n\n\n<p><strong>Aditi: <\/strong>Thank you so much, Meera!<\/p>\n\n\n\n<p>It is possible to see unexpected drops in your credit score, which can be alarming and confusing at the same time. For women, who often juggle between multiple financial responsibilities, these drops can be particularly worrying. If you are not aware about the reason for your credit score down and if you&#8217;re wondering why did my credit score drop ? or why did my credit score went down ? Then, Let&#8217;s look at some reasons for these unexpected drops in your score and the steps that you can take to solve this problem!<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_75 counter-hierarchy ez-toc-counter ez-toc-transparent ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\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 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/lxme.in\/v1\/why-did-my-credit-score-drop\/#But_first_what_is_a_credit_score\" >But first, what is a credit score?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/lxme.in\/v1\/why-did-my-credit-score-drop\/#What_could_lead_to_a_drop_in_your_credit_score\" >What could lead to a drop in your credit score?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/lxme.in\/v1\/why-did-my-credit-score-drop\/#1_Delayed_or_Missed_Payments\" >1. Delayed or Missed Payments<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/lxme.in\/v1\/why-did-my-credit-score-drop\/#2_High_Credit_Utilization\" >2. High Credit Utilization<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/lxme.in\/v1\/why-did-my-credit-score-drop\/#3_Multiple_Credit_Inquiries\" >3. Multiple Credit Inquiries<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/lxme.in\/v1\/why-did-my-credit-score-drop\/#4_Debt_Settlement\" >4. Debt Settlement<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/lxme.in\/v1\/why-did-my-credit-score-drop\/#FAQs\" >FAQs<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/lxme.in\/v1\/why-did-my-credit-score-drop\/#Why_did_credit_score_go_down_if_I_paid_on_time\" >Why did credit score go down if I paid on time?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/lxme.in\/v1\/why-did-my-credit-score-drop\/#Why_did_credit_score_decrease_for_no_reason\" >Why did credit score decrease for no reason?<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"But_first_what_is_a_credit_score\"><\/span><strong>But first, what is a credit score?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A credit score is an indicator of a person\u2019s creditworthiness i.e. their ability to repay the debt\/loan. It&#8217;s usually shown as a number based on how well a person has repaid their debts and their credit history with different loans and credit institutions.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_could_lead_to_a_drop_in_your_credit_score\"><\/span><strong>What could lead to a drop in your credit score?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"1_Delayed_or_Missed_Payments\"><\/span><strong>1. Delayed or Missed Payments<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Whether it is a credit card bill, loan EMI, or any other financial liability, timely payments are very important. Even one late payment can negatively impact your credit score. For example; if your credit card bills are due on the 3rd of every month and you either missed the payment or ended up paying it a few days later then that might affect your credit score.<\/p>\n\n\n\n<p><strong>What to Do:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Set up reminders or automatic payments to ensure you never miss the due date.<\/li>\n\n\n\n<li>If you&#8217;ve missed a payment, then make it as soon as possible and avoid any further penalties<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"2_High_Credit_Utilization\"><\/span><strong>2. High Credit Utilization<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Credit utilization refers to the percentage of your available credit that you are currently utilising. A high credit utilization ratio, particularly above 30%, can signal to lenders that you&#8217;re overly dependent on credit, which can negatively impact your score.<\/p>\n\n\n\n<p>For instance;<\/p>\n\n\n\n<p>Card 1: Credit 20,000, balance 7,000<\/p>\n\n\n\n<p>Card 2: Credit 25,000, balance 8,000<\/p>\n\n\n\n<p>Therefore the total credit is 45,000 and the total balance is 15,000<\/p>\n\n\n\n<p>This means that the ratio is 15,000\/45,000 i.e. 0.33 or 33.33%<\/p>\n\n\n\n<p><strong>What to Do:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Aim to keep your credit utilization below 30%.<\/li>\n\n\n\n<li>Pay off your credit card balances regularly, even if it means making multiple payments in a month.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"3_Multiple_Credit_Inquiries\"><\/span><strong>3. Multiple Credit Inquiries<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>When you apply for new home loan, lenders check your credit report, resulting in a hard inquiry (A hard inquiry is when a lender checks your credit report because you&#8217;ve applied for a credit card or a virtual credit card, and it can slightly lower your credit score). While a single inquiry might not have a significant impact, however, multiple inquiries within a short period can lower your score down.<\/p>\n\n\n\n<p><strong>What to Do:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Be cautious while applying for new credit frequently.<\/li>\n\n\n\n<li>Consider spacing out credit applications to minimize the impact on your credit score.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"4_Debt_Settlement\"><\/span><strong>4. Debt Settlement<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>If you&#8217;ve settled a debt for less than what you owe or filed for bankruptcy, it can seriously hamper your credit score. Debt settlement involves negotiating with a creditor to pay a lower amount than you owe, usually with help from a debt settlement company. Once the creditor agrees, they can&#8217;t pursue you for the remaining loan or debt balance, and you avoid the risk of being sued for that debt. But, these actions are seen as signs of financial trouble.<\/p>\n\n\n\n<p><strong>What to Do:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Focus on rebuilding your credit by making payments timely and managing your credit responsibly.<\/li>\n\n\n\n<li>Consider consulting with a financial advisor to develop a plan for improving your credit over time.<\/li>\n<\/ul>\n\n\n\n<p>A drop in your credit score can be concerning, but understanding the reasons behind it is the first step towards recovery. By addressing the factors contributing to the decline and adopting good financial habits, you can work towards <a href=\"https:\/\/lxme.in\/what-is-credit-score-how-to-improve-it\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/lxme.in\/what-is-credit-score-how-to-improve-it\/\" rel=\"noreferrer noopener\">improving your credit score<\/a>. Remember, it&#8217;s a slow process, and patience and consistency are key. Hence, above pointers are the answer to the questions like why did my credit score drop ? or why did my credit score went down ?<\/p>\n\n\n\n<p>As Indian women, financial independence and literacy are empowering. By staying informed and proactive about your credit health, you can confidently manage your finances and achieve your goals.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"FAQs\"><\/span><strong>FAQs<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n<div id=\"rank-math-faq\" class=\"rank-math-block\">\n<div class=\"rank-math-list \">\n<div id=\"faq-question-1724763586090\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"Why_did_credit_score_go_down_if_I_paid_on_time\"><\/span><strong>Why did credit score go down if I paid on time?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>Even if you paid on time, your credit score might go down due to factors like using too much of your credit limit, a recent hard inquiry, or changes in your credit mix.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1724763600785\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"Why_did_credit_score_decrease_for_no_reason\"><\/span><strong>Why did credit score decrease for no reason?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>Since your credit score is based on information found in your credit reports, it only changes as new information is reported. For example, if you\u2019ve been using more of your available credit or your credit limit has decreased, this can cause your score to drop. If you can\u2019t think of any action you\u2019ve taken to lower your score, review your credit reports for errors and signs of identity the problem.<\/p>\n\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n\n\n<script type=\"application\/ld+json\">\n{\n  \"@context\": \"https:\/\/schema.org\",\n  \"@type\": \"FAQPage\",\n  \"mainEntity\": [{\n    \"@type\": \"Question\",\n    \"name\": \"Why did credit score go down if I paid on time?\",\n    \"acceptedAnswer\": {\n      \"@type\": \"Answer\",\n      \"text\": \"Even if you paid on time, your credit score might go down due to factors like using too much of your credit limit, a recent hard inquiry, or changes in your credit mix.\"\n    }\n  },{\n    \"@type\": \"Question\",\n    \"name\": \"Why did credit score decrease for no reason?\",\n    \"acceptedAnswer\": {\n      \"@type\": \"Answer\",\n      \"text\": \"Since your credit score is based on information found in your credit reports, it only changes as new information is reported. 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Meera: Sure, Read this blog <a href=\"https:\/\/lxme.in\/v1\/why-did-my-credit-score-drop\/\" class=\"more-link\">&#8230;<span class=\"screen-reader-text\">  Why Did My Credit Score Drop?<\/span><\/a><\/p>\n","protected":false},"author":10,"featured_media":11042,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[657],"tags":[119,198,34],"class_list":["post-11041","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-credit","tag-credit-score","tag-financial-plan","tag-spending"],"acf":[],"_links":{"self":[{"href":"https:\/\/lxme.in\/v1\/wp-json\/wp\/v2\/posts\/11041","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lxme.in\/v1\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lxme.in\/v1\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lxme.in\/v1\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/lxme.in\/v1\/wp-json\/wp\/v2\/comments?post=11041"}],"version-history":[{"count":3,"href":"https:\/\/lxme.in\/v1\/wp-json\/wp\/v2\/posts\/11041\/revisions"}],"predecessor-version":[{"id":15972,"href":"https:\/\/lxme.in\/v1\/wp-json\/wp\/v2\/posts\/11041\/revisions\/15972"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/lxme.in\/v1\/wp-json\/wp\/v2\/media\/11042"}],"wp:attachment":[{"href":"https:\/\/lxme.in\/v1\/wp-json\/wp\/v2\/media?parent=11041"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lxme.in\/v1\/wp-json\/wp\/v2\/categories?post=11041"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lxme.in\/v1\/wp-json\/wp\/v2\/tags?post=11041"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}