Why has my credit rating gone down?
First of all, did you notice a drop the last time you checked your credit score? As a result, there are many reasons why your credit scores can be lowered and the factors that contribute to it.
To begin, here is a list of some of the most common:
1. Closing old accounts
It can lower your score. In general, if you have more than one account and they are all financially healthy it is best to keep them open. On the one hand, closing forgotten or past-due loans on the books will not only hurt a person’s financial profile but also their credit rating!
Consequently, you may be considered a risky borrower if your credit usage is too high. Lenders are interested in how much of the available credit you use, not just limits, so it’s important to be careful here.
2. Your payment history
Your payment history is essential to your credit rating. However, if you’ve been late with your payments, this factor will automatically affect the score. Therefore, it could even make it difficult to get future loans. That is why that we advise you to create a summary of all the upcoming due dates. So, make sure that there is no more forgetting when it comes to paying your debts.
In other words, to maintain a good credit score and avoid being seen as more likely to default, it is important to maintain a low level of usage.. The Financial Consumer Agency of Canada recommends keeping the amount used at 35% or less on all available lines. Also, this includes both loan payments and other sources like dollar value investments in one’s own. account with creditor banks.
In conclusion, when looking to keep your credit score in good condition, make sure that the percentage of available funds used on all accounts does not exceed 35%. For example, did a recent change in behaviour or financial situation trigger the decline? By closely monitoring anything that might affect your future scores, you can make sure it never happens again. As soon that you figure out why and how a problem occurred (and fix), don’t let this happen again!
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