Why Did My Credit Score Drop?

Quick Answer

Reasons why your credit score could have dropped include a missing or late payment, a recent application for new credit, running up a large credit card balance or closing a credit card.

A woman wearing a colorful shirt uses her laptop at the kitchen table.

1. You Have Late or Missing Payments
2. You Recently Applied for New Credit
3. Your Credit Utilization Increased
4. One of Your Credit Limits Decreased
5. You Closed a Credit Card
6. There Is Inaccurate Information on Your Credit Report
7. You’ve Experienced a Major Event Such as Foreclosure or Bankruptcy

Your credit score can drop for a number of reasons, including a recent late or missed payment, an application for new credit or a change to your credit limit or usage. To understand why your credit may have gone down, it's important to understand what affects your credit scores. Payment history has the biggest impact on your score, followed by the amounts owed on your debt accounts and the length of your credit history.

There are other elements, too, that could affect your credit scores, such as inaccurate information on your credit report. Read on for seven common reasons for a credit score drop, plus how to improve your credit if it recently decreased.

1. You Have Late or Missing Payments

Your payment history is the most important factor in your FICO^® Score^☉ , the credit scoring model used by 90% of top lenders. It accounts for 35% of your score, and even one late or missed payment can have a negative impact. So, it's key to make sure you make all your payments on time.

If you are more than 30 days past due on a payment, credit issuers will likely report the delinquency to at least one of the three major credit bureaus, likely resulting in a drop in your score. Payments that become 60 or 90 days past due will have an even greater effect on your score.

If these delinquencies are not paid, the credit issuer may send your debt to a collection agency, and the collection account may be recorded on your credit report. Records of your late and missed payments remain in your credit file for seven years, while positive payment history on an open account can stay on file indefinitely (or 10 years if the account is closed in good standing).

Learn more >> What Affects Your Credit Scores?

2. You Recently Applied for New Credit

Whenever you apply for a new line of credit, lenders will request a copy of your credit report to determine your creditworthiness. They decide whether to lend to you by viewing characteristics like your payment history, credit usage and the types of accounts you currently hold.

Each time you authorize someone other than yourself, such as a lender, to check your credit history, a hard inquiry is recorded on your credit report and could slightly affect your score. If you apply for too much credit in a short period of time, it can negatively impact your scores and affect the likelihood that lenders will approve you for new credit.

Depending on how many inquiries you already have, a new hard inquiry could cause your score to drop, but potentially only for a short period of time. And any effect on your credit score should disappear in about one year.

Learn more >> How Many Hard Inquiries Is Too Many?

3. Your Credit Utilization Increased

Maxing out your credit card—or getting close to your limit—could cause a quick drop in your credit score. Depending on your card's credit limit, making a large purchase or simply running up your balance can increase your credit utilization ratio, the second most important factor in calculating your FICO^® Score. Increased credit utilization can indicate to lenders that you are overextended and that, financially, you're not well-positioned to take on new debt.

You can calculate your overall credit utilization ratio by adding all your credit card balances at any given time and dividing that sum by your total revolving credit limit. For example, if you typically charge about $2,000 each month, and your total credit limit across all your cards is $10,000, your overall utilization ratio will be 20%.

Credit scoring models consider overall credit utilization across all credit cards as well as each card's utilization ratio. You should aim to keep your credit utilization ratio below 30%, and for the best scores, below 10%. So, if your total credit limit is $10,000, keep your balances below $3,000 at all times to help keep your score in good shape.

Learn more >> How to Calculate Credit Card Utilization

4. One of Your Credit Limits Decreased

An issuer might lower your credit limit for a number of reasons, including if you've been using the card infrequently or repeatedly spending over the limit. If one of your credit limits decreases, it can increase your credit utilization ratio and negatively affect your credit scores.

Imagine this example: If your total credit limit was $10,000 and you carried a balance of $3,000, your utilization ratio would be 30%. If a credit card issuer lowered your limit to $6,000, but your balance remained the same, your utilization ratio would jump up to 50%. Even though you didn't charge up a higher balance, your overall credit utilization ratio increased. That, in turn, could cause your credit score to drop.

Credit card issuers set initial credit limits based on factors including:

Income
Debt-to-income ratio
Credit history
Credit score

You can request a credit limit increase from your current issuers or open a new credit card account if you're concerned that your credit limit is too low. But know that if your limit recently went down, an increase might be hard to come by, and it may be best to wait to request more credit until your score improves.

Learn more >> What to Do if Your Credit Limit Decreases

5. You Closed a Credit Card

Closing a credit card has the potential to hurt your credit score if it increases your credit utilization ratio. When you cancel a credit card account, you reduce the amount of revolving credit available to you, which can cause your utilization to spike (particularly if you carry high balances on other cards).

Closing a credit card account you have had for some time can also eventually shorten your average credit age, which could factor into your credit score.

The length of your credit history counts for 15% of your FICO^® Score, and a longer history is better for your scores. Keep in mind, however, that if your account is closed in good standing (meaning you made all your payments on time), it could remain on your credit report for up to 10 years and contribute to a positive payment history during that time.

Unless the card has a high annual fee or tempts you to overspend, you might want to keep the account open to maintain your credit limit and length of credit history.

Learn more >> Should You Cancel Your Unused Credit Cards or Keep Them?

6. There Is Inaccurate Information on Your Credit Report

Regularly checking your credit reports is one of the best ways to ensure no inaccurate information shows up in your file. Although it's rare, mistakes happen, and it is possible that incorrect information on your credit report—such as an inaccurate payment history—is causing your scores to drop.

If something in your report is inaccurate, it could be a result of a lender accidentally reporting the wrong information. It could also be a sign that you have fallen victim to identity fraud. You have the right to dispute information you don't recognize or believe is potentially fraudulent. If you see something you believe is inaccurate, you can dispute the information with all three credit bureaus.

7. You've Experienced a Major Event Such as Foreclosure or Bankruptcy

The late payments that often lead up to a bankruptcy or foreclosure harm your credit scores—and the events themselves can make matters worse.

Bankruptcy is a legal process initiated by borrowers looking to get relief from debt payments, and it causes severe harm to a consumer's credit.

The amount of time a bankruptcy stays on a credit report depends on the type of bankruptcy filed:

Chapter 7 bankruptcy appears on your report for 10 years from the date you filed.
Chapter 13 bankruptcy appears on your credit report for seven years from the date you filed.

Foreclosure is when your mortgage lender takes possession of your house, often following at least four consecutive months of missed payments, and also seriously damages your credit.

In addition to damaging your credit score, either event can disqualify you from certain types of borrowing in the future. A mortgage lender may be unlikely to take you on as a borrower if you have a foreclosure in your past, for instance. Foreclosure stays on your credit report for seven years.

What Is a Good or Bad Credit Score?

A good credit score is one that falls between 670 and 739 for a FICO^® Score, which uses a scoring range of 300 to 850. Scores above 739 are considered very good or exceptional. Scores below 669 are considered fair or poor. In 2023, the average FICO^® Score in the U.S. was 715, according to Experian data.

FICO Score 8 Ranges by Population

Maintaining a good credit score has plenty of benefits, including potentially saving you a significant amount of money—and stress—over time. Good scores will likely help you qualify for more credit products at lower interest rates. Bad scores, on the other hand, may prevent you from qualifying for certain types of credit or may result in getting approved for credit products at higher interest rates, since your profile presents a bigger risk to the lender.

Learn more >> What Are the Different Credit Score Ranges?

Ways to Improve Your Credit Scores

Here are several ways that you can improve your credit scores.

Pay your bills on time. This is one of the most crucial steps to getting and keeping a good credit score. The best way to pay on time is to set up automatic payments so you won't miss a bill. But make sure you have enough money in the connected bank account to avoid an overdraft.
Minimize overall debt. If possible, don't lean on credit to buy items you're not able to pay for in cash, or that you can't pay off by the end of the month. This keeps your payments manageable and your ongoing credit utilization ratio low. Your goal should be to bring your credit card balance to $0 at month's end.
Monitor your credit regularly. Routinely checking your credit score can help you identify dips in your score quickly and course-correct if necessary. Free credit monitoring from Experian can help you keep tabs on both your FICO^® Score and credit report, and keep you updated when there are any changes to your credit report.
Avoid applying for unnecessary credit cards. Not only do some cards have pricey annual fees, but an abundance of cards might result in more spending than you can handle.
Practice responsible spending habits. Setting up a budget—even a general one that categorizes your spending into a few overall buckets and doesn't require too much upkeep—can help you spend within your means over the long term.

Learn more >> How to Improve Your Credit Score

Frequently Asked Questions

To see why your credit score may have decreased, start by checking your credit reports. You can review your credit report for free from Experian to see what information is affecting your credit. You can also request a free copy of your credit report from each of the three bureaus for free once a year from AnnualCreditReport.com.
From within the Experian credit hub, you'll also have access to personalized insights on your credit overview page. For example, you can review your "score ingredients" to see the most impactful factors affecting your FICO^® Score. For each scoring factor, you can see whether your recent activity is helping or hurting your score.
No, your credit score won't go down if you check it. Checking your own credit is considered a soft inquiry, which doesn't impact your credit scores.
Other types of soft inquiries include when an employer or landlord checks your credit with your permission, or when lenders run credit checks to prequalify you for credit. On the other hand, hard inquiries, which occur when you apply for new credit, can cause a minor decrease in your score.
Higher credit utilization decreases your score because it can be a sign of over-reliance on credit. Credit scores measure how creditworthy someone is—in other words, how likely they are to repay money that they borrow on time.
Credit utilization factors into creditworthiness because it can be an indicator of how well you're managing credit. For example, a maxed out credit card could signal that someone is financially overextended.

What to Do About a Dip in Credit

A drop in your credit score can be stressful, but it doesn't have to be permanent. There are ways to bring your score back up and to prevent another decrease in the future.

To see personalized information on what caused your credit score to change, plus advice on credit moves you can make to increase your score, check your credit score for free through Experian. Remember that credit scores are dynamic, and that you have the ability to improve yours with your own habits—an empowering truth that you can apply to other parts of your financial life too.

How Good Is Your Credit Score?

300 credit score 301 credit score 302 credit score 303 credit score 304 credit score 305 credit score 306 credit score 307 credit score 308 credit score 309 credit score 310 credit score 311 credit score 312 credit score 313 credit score 314 credit score 315 credit score 316 credit score 317 credit score 318 credit score 319 credit score 320 credit score 321 credit score 322 credit score 323 credit score 324 credit score 325 credit score 326 credit score 327 credit score 328 credit score 329 credit score 330 credit score 331 credit score 332 credit score 333 credit score 334 credit score 335 credit score 336 credit score 337 credit score 338 credit score 339 credit score 340 credit score 341 credit score 342 credit score 343 credit score 344 credit score 345 credit score 346 credit score 347 credit score 348 credit score 349 credit score 350 credit score 351 credit score 352 credit score 353 credit score 354 credit score 355 credit score 356 credit score 357 credit score 358 credit score 359 credit score 360 credit score 361 credit score 362 credit score 363 credit score 364 credit score 365 credit score 366 credit score 367 credit score 368 credit score 369 credit score 370 credit score 371 credit score 372 credit score 373 credit score 374 credit score 375 credit score 376 credit score 377 credit score 378 credit score 379 credit score 380 credit score 381 credit score 382 credit score 383 credit score 384 credit score 385 credit score 386 credit score 387 credit score 388 credit score 389 credit score 390 credit score 391 credit score 392 credit score 393 credit score 394 credit score 395 credit score 396 credit score 397 credit score 398 credit score 399 credit score 400 credit score 401 credit score 402 credit score 403 credit score 404 credit score 405 credit score 406 credit score 407 credit score 408 credit score 409 credit score 410 credit score 411 credit score 412 credit score 413 credit score 414 credit score 415 credit score 416 credit score 417 credit score 418 credit score 419 credit score 420 credit score 421 credit score 422 credit score 423 credit score 424 credit score 425 credit score 426 credit score 427 credit score 428 credit score 429 credit score 430 credit score 431 credit score 432 credit score 433 credit score 434 credit score 435 credit score 436 credit score 437 credit score 438 credit score 439 credit score 440 credit score 441 credit score 442 credit score 443 credit score 444 credit score 445 credit score 446 credit score 447 credit score 448 credit score 449 credit score 450 credit score 451 credit score 452 credit score 453 credit score 454 credit score 455 credit score 456 credit score 457 credit score 458 credit score 459 credit score 460 credit score 461 credit score 462 credit score 463 credit score 464 credit score 465 credit score 466 credit score 467 credit score 468 credit score 469 credit score 470 credit score 471 credit score 472 credit score 473 credit score 474 credit score 475 credit score 476 credit score 477 credit score 478 credit score 479 credit score 480 credit score 481 credit score 482 credit score 483 credit score 484 credit score 485 credit score 486 credit score 487 credit score 488 credit score 489 credit score 490 credit score 491 credit score 492 credit score 493 credit score 494 credit score 495 credit score 496 credit score 497 credit score 498 credit score 499 credit score 500 credit score 501 credit score 502 credit score 503 credit score 504 credit score 505 credit score 506 credit score 507 credit score 508 credit score 509 credit score 510 credit score 511 credit score 512 credit score 513 credit score 514 credit score 515 credit score 516 credit score 517 credit score 518 credit score 519 credit score 520 credit score 521 credit score 522 credit score 523 credit score 524 credit score 525 credit score 526 credit score 527 credit score 528 credit score 529 credit score 530 credit score 531 credit score 532 credit score 533 credit score 534 credit score 535 credit score 536 credit score 537 credit score 538 credit score 539 credit score 540 credit score 541 credit score 542 credit score 543 credit score 544 credit score 545 credit score 546 credit score 547 credit score 548 credit score 549 credit score 550 credit score 551 credit score 552 credit score 553 credit score 554 credit score 555 credit score 556 credit score 557 credit score 558 credit score 559 credit score 560 credit score 561 credit score 562 credit score 563 credit score 564 credit score 565 credit score 566 credit score 567 credit score 568 credit score 569 credit score 570 credit score 571 credit score 572 credit score 573 credit score 574 credit score 575 credit score 576 credit score 577 credit score 578 credit score 579 credit score

580 credit score 581 credit score 582 credit score 583 credit score 584 credit score 585 credit score 586 credit score 587 credit score 588 credit score 589 credit score 590 credit score 591 credit score 592 credit score 593 credit score 594 credit score 595 credit score 596 credit score 597 credit score 598 credit score 599 credit score 600 credit score 601 credit score 602 credit score 603 credit score 604 credit score 605 credit score 606 credit score 607 credit score 608 credit score 609 credit score 610 credit score 611 credit score 612 credit score 613 credit score 614 credit score 615 credit score 616 credit score 617 credit score 618 credit score 619 credit score 620 credit score 621 credit score 622 credit score 623 credit score 624 credit score 625 credit score 626 credit score 627 credit score 628 credit score 629 credit score 630 credit score 631 credit score 632 credit score 633 credit score 634 credit score 635 credit score 636 credit score 637 credit score 638 credit score 639 credit score 640 credit score 641 credit score 642 credit score 643 credit score 644 credit score 645 credit score 646 credit score 647 credit score 648 credit score 649 credit score 650 credit score 651 credit score 652 credit score 653 credit score 654 credit score 655 credit score 656 credit score 657 credit score 658 credit score 659 credit score 660 credit score 661 credit score 662 credit score 663 credit score 664 credit score 665 credit score 666 credit score 667 credit score 668 credit score 669 credit score

670 credit score 671 credit score 672 credit score 673 credit score 674 credit score 675 credit score 676 credit score 677 credit score 678 credit score 679 credit score 680 credit score 681 credit score 682 credit score 683 credit score 684 credit score 685 credit score 686 credit score 687 credit score 688 credit score 689 credit score 690 credit score 691 credit score 692 credit score 693 credit score 694 credit score 695 credit score 696 credit score 697 credit score 698 credit score 699 credit score 700 credit score 701 credit score 702 credit score 703 credit score 704 credit score 705 credit score 706 credit score 707 credit score 708 credit score 709 credit score 710 credit score 711 credit score 712 credit score 713 credit score 714 credit score 715 credit score 716 credit score 717 credit score 718 credit score 719 credit score 720 credit score 721 credit score 722 credit score 723 credit score 724 credit score 725 credit score 726 credit score 727 credit score 728 credit score 729 credit score 730 credit score 731 credit score 732 credit score 733 credit score 734 credit score 735 credit score 736 credit score 737 credit score 738 credit score 739 credit score

740 credit score 741 credit score 742 credit score 743 credit score 744 credit score 745 credit score 746 credit score 747 credit score 748 credit score 749 credit score 750 credit score 751 credit score 752 credit score 753 credit score 754 credit score 755 credit score 756 credit score 757 credit score 758 credit score 759 credit score 760 credit score 761 credit score 762 credit score 763 credit score 764 credit score 765 credit score 766 credit score 767 credit score 768 credit score 769 credit score 770 credit score 771 credit score 772 credit score 773 credit score 774 credit score 775 credit score 776 credit score 777 credit score 778 credit score 779 credit score 780 credit score 781 credit score 782 credit score 783 credit score 784 credit score 785 credit score 786 credit score 787 credit score 788 credit score 789 credit score 790 credit score 791 credit score 792 credit score 793 credit score 794 credit score 795 credit score 796 credit score 797 credit score 798 credit score 799 credit score

Why Did My Credit Score Drop?

In this article:

1. You Have Late or Missing Payments

2. You Recently Applied for New Credit

3. Your Credit Utilization Increased

4. One of Your Credit Limits Decreased

5. You Closed a Credit Card

6. There Is Inaccurate Information on Your Credit Report

7. You've Experienced a Major Event Such as Foreclosure or Bankruptcy

What Is a Good or Bad Credit Score?

Ways to Improve Your Credit Scores

Frequently Asked Questions

What to Do About a Dip in Credit

What Makes a Good Credit Score?

How Good Is Your Credit Score?

Resources

Latest Research

Latest Reviews

Credit support

Credit advice

Most popular

Credit reports

Credit scores

Improving credit

Establishing credit

Identity Theft support

Identity Theft Advice

Most popular

Identity theft and fraud

Cybersecurity

Privacy

Money advice

Most popular

Digital checking account

Save money on bills

Credit Card advice

Most popular

Balance transfer

Cash back

For bad credit

For fair credit

For students

APR

Rewards

New to credit

Loan advice

Most popular

Debt consolidation

Personal

Auto Insurance advice

Most popular

In this article:

1. You Have Late or Missing Payments

2. You Recently Applied for New Credit

3. Your Credit Utilization Increased

4. One of Your Credit Limits Decreased

5. You Closed a Credit Card

6. There Is Inaccurate Information on Your Credit Report

7. You've Experienced a Major Event Such as Foreclosure or Bankruptcy

What Is a Good or Bad Credit Score?

Ways to Improve Your Credit Scores

Frequently Asked Questions

What to Do About a Dip in Credit

What Makes a Good Credit Score?

How Good Is Your Credit Score?

Resources

Latest Research

Latest Reviews