So you decided you wanted to fix your credit, and you noticed a huge dip in your credit score. This is actually very common with people new to fixing their credit. Many expect a huge rise after removing past debts, only to be devastated to find out that their credit score dropped as much as 200 points from day to night. This is why we
So why did my credit score drop?
Many factors go into your credit score, one being credit history, or “credit utilization”. By removing credit debt, you are simultaneously reducing the amount of history you have on your credit report, which will lead to a drop. This also shows fewer active accounts on your history, and a shorter age of credit utilization. Here are a few of the factors that go into your credit report.
- Payment History
- Credit Utilization
- Length of credit history
- Mix of credit types
- Recent applications
So what do I do now?
The good news is, it’s not the end of the world. In many ways, that dip is actually a blessing in disguise, and may be necessary for your long term credit score health. It may be better that you don’t close the account altogether and you continue making on-time payments for any new balances, your score should neutralize, and ultimately rise, in time.
We highly recommend working with our company to create an informed, detailed strategy before beginning to repair your credit. You can prevent unnecessary dips in your credits, and assure that you are on the right path to success. For more information, please set up a consultation with one of our reps today!