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Heres what you gotta know.
Why Did My Credit Score Drop?
6 Common Reasons
Your credit score is meant to represent your ability to repay borrowed money.
If it drops, its reflecting a negative change in your credit activity.
Credit Score Drop After Paying Off Debt Why?
Sometimes paying off a loan can lead to a slight score dip.
Thats usually because:
Heres an example:
Still, that shouldnt stop you from making your final payment.
While your score might dip slightly, paying off debt is a smart step toward long-term financial stability.
How Much Can Your Credit Score Drop?
The credit scoring formula is proprietary and can be hard to understand.
What To Do If Your Credit Score Drops
Try not to panic if you see a drop.
But if something more serious has dragged down your score, theres still no cause for alarm.
It will take some work and time but you might get the score back up.
Start by reviewing your credit report.
Youll want to look for the following issues.
Errors you could Dispute
Sometimes, a credit report is just wrong.
It may list accounts that dont truly belong to you or have otherwise inaccurate or outdated information.
A few phone calls and/or the submission of a few documents may be enough toresolve the issue.
This is one of the main reasons you want tocheck your credit reportson a regular basis.
Need a Credit Comeback?
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