Did your credit score drop?

1. You used up too much credit

The concept of credit utilization comes into play. Even though your really good about paying your obligations off one time it is going to take more than being a good person who does this. To give you an idea of where you should be at ideally you want to stay within a 30% of your available credit allowance. Keeping your credit limit under 30% of your credit allowance is a good practice to keep.

2. Maybe you missed a payment somewhere

We all get busy, it is easy to let days and time pass you by. Missing a payment can leave you with a scary feeling, but don’t worry just call them and tell them you missed a payment and ask them to waive the late fee. They will look at your account to see if you are a habitual person who always misses a payment, if your history doesn’t show this they will forgive you and waive that fee. With all the technology in our hands and around us,s there are many apps, calendars, and notifiers that you can use to help remind you so you are not late on your next payment.

3. Keep an inventory of all your accounts.

Maybe you have old accounts lying around that you forgot about. If its been months or years that you have used those it might be a good idea to use them every once in a while, It is not recommended that you close those accounts once you have opened them. Just make sure you are not opening lots of accounts as this hurts your credit as well.

4. Take care of those significant loans

It is a great feeling paying off a large loan such as a home, car, or a student loan. Paying off a huge debt reduces your credit score, why?
By paying off a large sum of debt creditors see this as decreasing your credit. Don’t worry about it decreasing your credit, be happy and rejoice that you have lifted a huge debt off your back.

5. Loans and credit cards affect your credit

Maybe your recent application for a loan or a credit affected your credit score. Making an application for one of those two things causes an institution to perform a “hard pull” or an inquiry on your credit. Performing an inquiry on your credit lowers your credit score so do this only a few times, do not make this a habit.

6. A negative impact can affect your credit

Maybe you recently had some major financial flaw hit your personally such as a foreclosure, bankruptcy, or a lawsuit. All these things can impact your credit. These situations will show up on your credit.

It is best practice to check your credit at least once a year. What to look for when checking your credit: Look for derogatory marks, make sure you see greens and very little yellows. Be concerned if you see red warnings on your credit. Monitor your auto banking payments, scan your credit card bills. Set reminders and use calendars to mark when your obligations are due. Remember if you miss a payment contact them and ask to waive the late fee, and remember to attack your obligations with great enthusiasm. If you live in the greater Austin area and are struggling with your credit and find your self-being denied on your next purchase or find your self-paying very high-interest rates feel free to contact me. I can help you build up your credit and help you save money and leverage your buying power.

Rene Gonzales