Have you noticed that your credit score has dropped and you just can’t figure out why? Missing loan payments may be an obvious reason, but the following are some other reasons why your credit score may have suddenly dropped:
Hard credit inquiries
Applying for a line of credit—such as a credit card, mortgage, or auto loan—will result in a hard credit inquiry. Even just one hard credit inquiry can cause your credit score to drop a few points. If you’ve applied for multiple loans recently and you’ve noticed a significant drop in your score, that could be why.
Closing out accounts
You paid off your credit card debt and closed out your accounts—so why would this cause your score to drop instead of go up? Although it’s a good idea to pay off debt, closing out a credit card—especially one that has a long history—can actually cause your score to go down. Even if you don’t charge on it, keeping at least one account open (the one you’ve had the longest) will usually be beneficial to your score.
The amount of debt you’re in
Even if you’re always on time with your loan payments, having a large amount of debt can still cause your credit score to go down, especially if all of your credit cards are maxed out. At the same time, having absolutely no debt can cause your score to drop as well. It’s usually best to maintain a very small amount of debt.
Credit report mistakes
If you still can’t figure out why your credit score has dropped, look carefully at your credit report. It’s common for a credit report to contain errors, and a mistake on your credit report might be what’s causing the drop in your score.
Do you need cash to eliminate debt and catch up on bills? If you’re receiving payments from a long-term payment stream, such as a structured settlement or annuity, you may be able to get cash now. This is possible by selling some or all of your future payments to Peachtree Financial Solutions. We can purchase the rights to your future payments and can offer you that money upfront in the form of a lump sum payment; you can generally receive that money in as little as 90 days. Contact Peachtree Financial Solutions today to learn more about selling some or all of your future payments for a lump sum of cash.
Nothing above is meant to provide financial or tax advice. You should meet with appropriate professionals for such services.