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Why did my credit score drop 40 points?
If your FICO score is high then the possibility is you will get the approval of your loan or credit card easily with a much-reduced interest rate. Your lifestyle became so easy. You will get the freedom of credit and enjoy life as per your wish. However, there is another possibility of just the opposite of this if your credit score is not good.
There are many reasons your credit score may drop, next we will discuss why did my credit score drop 40 points and how to protect it from decreasing.
If your FICO score is low then the door to your happiness is close all around you and your world is only getting smaller every day. You will never get your dream house, even not in your lifetime. It also restricts you to access a product or services offered by the bank or other financial institutions.
Reason Why credit score drop 40 points
Avoiding few mistakes can put you way ahead of the game and help you to improve your credit score in the long run. If your credit score is down 40 points or let’s say you checked that your score is going down then you should check the following things and figure out what actually happened in your case.
- FICO score factors can hurt your score
- Not pay your bill on time, You make any late payment recently
- Any collection account added to your report
- Your report showing any Charged off
- Any Hard inquires showing
- Not keeping your “old” credit cards or old accounts
- Not Pay off your high Interest and “New” Credit Accounts First
- Lack of Accounts Diversity
- Derogatory Mark
- An Error from Data Furnisher
- Identity Theft
In real life experience all these are the main reason that happened to most of the people. When your credit score drops 40 points, the first thing you should do is check your latest credit report and identify why your score dropped 40 points. There are many reasons your credit score can drop 40 points.
You can protect your credit score easily by following and maintaining few simple thing that i am going to discuss in this blog post.
Your FICO score can be split into few major factors like payment history (35%), Debt Burden (30%), Length of History (15%), Types of Credit (10%), and Recent Credit Searches (10%). I will discuss how these factors affect your credit score.
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