Struggling to keep your Credit Score high despite always paying on time? You’re not alone. A dip in your Credit Score can be frustrating, especially when you’re doing everything right with your payments. But here’s the good news: these drops are often temporary, and with a few smart strategies, you can bounce back quickly. In today’s post, we’ll explore the factors that might drag your score down and share actionable tips to help you regain and maintain a strong credit profile.

High Credit Utilization Ratio

Keeping a low credit utilization ratio is crucial for a high Credit Score. However, when your credit card balances are high compared to your available credit, it can damage your Credit Score as it indicates to lenders that you may be over-reliant on credit. Doing this over some time can eventually drag your Credit Score down even if you’re making timely payments.

Missed Payments on Multiple Accounts

Your Credit Score is based on your overall credit behaviour, not just on one account. Missing payments on other credit lines like personal loans or additional credit cards can significantly lower your score and outweigh your consistent on-time payments. Hence, it’s important to keep track of all your payments, not just one account.

Hard Inquiries

Applying for multiple types of credit in a short span can lead to several hard inquiries, which might slightly lower your Credit Score. This occurs because each inquiry suggests you are seeking new credit, potentially signalling higher risk to lenders. Additionally, frequent inquiries may give the impression of financial trouble, causing a temporary drop in your score. To prevent this, minimize the number of credit applications and space them out to avoid impacting your Credit Score.

Apart from this, your Credit Score can be affected by various factors, including how long you’ve had credit, the types of credit you use, and the total amount of debt you have. Which is why having a financial advisor is important! They can offer you practical tips and help identify any issues that might be impacting your Credit Score.

Oolka can help you improve your Credit Score even after a drop. Download the Oolka app now!

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