August 23rd, 2012

Why Did My Credit Score Drop?

16 Comments | Twitter | |

 

 

It’s never a fun surprise to see that your credit score dropped. Unfortunately, you can’t always fix it right away, but you can sometimes figure out what might have caused it.

Score drops usually break down into three categories:

    • Things you did.
    • Things you didn’t do.
    • Things someone else did.

Here are some of the most common causes of drops:

  1. You closed an account, either by paying off a loan, or closing a credit card. Your credit history and available credit will change as a result.
  2. You opened, or tried to open a new account. Inquiries and new accounts will ding your score too.
  3. You’re spending more or paying off less. If your credit utilization at the point your creditors reported to the bureaus is higher than normal, your score might’ve dropped. If you missed a payment, that might’ve done it too.
  4. There’s a new derogatory mark on your history. Collections, tax liens, defaults… all these can do a number on your credit score.
  5. And of course, there could be a new mistake on your report. The best way to figure out what’s going on is to pull your credit reports. If there’s something wrong in your report, dispute it, and your score could improve.

It’s good to keep in mind that some fluctuations in your score might occur because there are a number of factors influencing it, but you shouldn’t be too concerned over small drops over a short amount of time.

To monitor for changes in your credit report that might affect your score, enroll in Credit Karma’s free credit monitoring and keep an eye on your credit notifications. This can help you pinpoint the reason for score drop.

Overall, continue practicing healthy financial habits and your score should recover.

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Disclaimer: All information posted to this site was accurate at the time of its initial publication. Efforts have been made to keep the content up to date and accurate. However, Credit Karma does not make any guarantees about the accuracy or completeness of the information provided. For complete details of any products mentioned, visit bank or issuer website.

16 Comments

  1. Why is my account discontinued

    doug mullins at 1:58 pm on May 27, 2013
  2. Jenna

    Hi Doug, if you’re having trouble with your Credit Karma account, please feel free to email support@creditkarma.com and we’d be happy to help you out. Thanks!

    Jenna at 3:16 pm on May 28, 2013
  3. Yes wondering why credit score has drop..

    tramaine white at 4:11 pm on July 29, 2014
  4. Mike

    Thanks for the question, Tramaine. There are a whole variety of reasons why credit scores might change, some of which are listed in this blog post. Since we don’t calculate your score but instead simply display what we receive from TransUnion, we unfortunately don’t have any additional insight into exactly why your score dropped. If you’d like some further reading, I’d suggest this article on the topic: https://www.creditkarma.com/article/MyScoreDroppedWhy

    Mike at 9:21 am on July 30, 2014
  5. My credit score dropped from 753 to 747 about two weeks ago, right after I paid off my mortage, and paid in full all credit debt. Currently the only debt I have is items I purchase monthly (gasoline, food/clothing purchases, utilities, etc.) and when I receive the credit card bill, it is paid in full. What’s up with that

    Judy at 2:27 pm on August 10, 2014
  6. What do you constitute as a “drop” in credit score over a short period of time. For me I started with 680 in 1/8/2014 then 687 in 2/20/2014 then 703 in 3/2/2014 and then 717 in 6/30/2014. This is great but today I logged on to creditkarma to find it went back to 704. I have 100% payment history. I did not open any cards. My utilization always falls under 15% if that. I watched the video about score drops but then I am wondering what is a “small” drop.

    Help…I am deeply concerned for I have worked SO hard since my bankruptcy in July 2003. I am happy that I have a decent score but I have to admit I am extra sensitive to the drops. It makes me think I am doing something wrong.

    Erica at 11:56 am on September 3, 2014
  7. Mike

    Thanks for the comment, Erica. I definitely understand where you’re coming from – when you’re trying to grow your credit score, any minor set back can be anxiety-inducing. I can’t specifically define “small drop” for you, but, as the video points out, month-to-month fluctuation isn’t uncommon. Keeping an eye on your credit health over the long term, which you seem to be doing a great job at, might be a better idea than stressing over this specific decrease.

    For some similar reading, I’d recommend this article: https://www.creditkarma.com/article/how-often-should-my-score-change

    Mike at 2:32 pm on September 3, 2014
  8. So my credit score has been fluctuating dramatically in the past few months. In the past month it has dropped 32 points and we haven’t done anything different. Could you possibly tell me why and if not, tell me who I could ask that might give me the answers I’m looking for??

    Lori at 10:24 pm on September 5, 2014
  9. Mike

    Hi Lori – The credit score you see on your Credit Karma account comes directly from TransUnion. Since so many factors go into your credit score, it might not be possible to pinpoint one exact reason why your score decreased in the short-term. I’d suggest this article for further reading on the topic: https://www.creditkarma.com/article/MyScoreDroppedWhy

    Mike at 9:14 am on September 8, 2014
  10. I have a concern regarding one Visa credit card account. I’ve had the account since 2011 and just received a new card due to the Home Depot situation.

    The following is showing on my Credit Report Activity on CreditKarma and wonder if this will affect my credit score on this one card I have.

    Randal at 9:12 am on October 8, 2014
  11. Mike

    Hi Randal – Thanks for your question. Our member support team would be happy to investigate this issue for you. You can get in touch with them here: https://www.creditkarma.com/about/help

    Thanks again!

    Mike at 9:03 am on October 9, 2014
  12. If a bank closes an account and reopens it on a different line for which i am unaware of the change, as discover did this past month and one of my the other banks that had 4 or 5 store accounts in it, did the same thing a month or two by changing their bank name or merging. do these add and drops for the same credit limit amounts affect my credit score?

    sue at 7:43 am on October 10, 2014
  13. Mike

    Hey Sue – Great question. We actually wrote an article about this topic very recently. Check it out here: https://www.creditkarma.com/article/credit-account-name-change

    Thanks!

    Mike at 8:51 am on October 10, 2014
  14. I am having a really hard time understanding credit Karma’s procedures. I became a member of credit Karma in March 2014. My credit line at that time or credit numbers were 713. The next time the system checked on everything my credit line had risen to 721. The next month I had a small dip in my credit numbers to 718. At this time without making hardly any changes my credit numbers rose to 738. After several months of no change I logged in today and found that with no changes in my credit the numbers had dropped to 700 even. I do not understand this whatsoever? What gives on these numbers? Do you folks have a dartboard at the other end of the room that you throw darts at? Or is there a method to the madness I am seeing? At least with my fico being 799 if I were to ask for a new loan for my house so that my interest on it would go down. I might have a ghost of a chance. Why after several months of my credit numbers being 738 would my credit score dropped to 700 even?
    Thank you
    DRAY

    D Ray East at 9:54 am on October 15, 2014
  15. Mike

    Hey Dray – Thanks for your comment. The credit scores you see on Credit Karma come directly from TransUnion, one of the three major credit bureaus. Because of this, and because of the complexity of the scoring system, we can’t necessarily pinpoint one cause for the drop in your credit score. I’d recommend this article for some general reading on why credit scores change: https://www.creditkarma.com/article/MyScoreDroppedWhy

    Mike at 4:36 pm on October 15, 2014

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