Why Did My Credit Score Dropped 70 Points

Why Did My Credit Score Drop 70 Points?

A good credit score is crucial when it comes to financial stability. It determines your eligibility for loans, credit cards, and even affects your insurance rates. Therefore, it can be quite alarming to see a sudden drop of 70 points in your credit score. But what could be the reasons behind such a significant decline? Let’s delve into some possible explanations:

1. Late or Missed Payments: Payment history plays a crucial role in determining your credit score. A single late or missed payment can have a significant impact on your credit score, especially if it is a recent occurrence.

2. High Credit Utilization: Credit utilization refers to the percentage of your available credit that you are currently using. If you have accumulated high credit card debt or have maxed out your credit cards, it can negatively impact your credit score.

3. New Credit Applications: Whenever you apply for new credit, whether it’s a credit card or a loan, the lender performs a hard inquiry on your credit report. Multiple hard inquiries within a short period can lower your credit score as it may indicate a higher risk of default.

4. Closing Old Accounts: Closing old credit accounts can also lead to a drop in your credit score. This is because it affects the length of your credit history and reduces the overall amount of credit available to you.

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5. Collections or Public Records: If you have any overdue debts that have been sent to collections or have public records such as bankruptcies or judgments, they can significantly impact your credit score.

6. Change in Credit Mix: A healthy credit mix includes a combination of credit cards, loans, and mortgages. If you have recently closed an account or paid off a loan, it can affect the diversity of your credit, which may cause a decline in your credit score.

7. Identity Theft or Fraudulent Activity: Unfortunately, identity theft is a prevalent issue in today’s digital world. If someone has stolen your identity and used it to make unauthorized purchases or open fraudulent accounts, it can have a severe impact on your credit score.


1. Will my credit score recover after dropping 70 points?
Yes, your credit score can recover after a significant drop. How long it takes to recover depends on various factors, such as the reason for the drop and your overall credit history. By practicing good credit habits, such as making payments on time and reducing credit card balances, you can gradually improve your score.

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2. Can a single missed payment cause such a significant drop in my credit score?
While a single missed payment can impact your credit score, a drop of 70 points is unlikely to be solely due to one missed payment. It is more likely a combination of factors, such as high credit utilization or other negative events on your credit report.

3. How long do hard inquiries affect my credit score?
Hard inquiries remain on your credit report for two years. However, their impact on your credit score diminishes over time. Typically, the negative effect of a hard inquiry is minimal after six months and disappears entirely after one year.

4. Is it advisable to close old accounts to improve my credit score?
Closing old accounts can harm your credit score, especially if they have a long credit history. Instead of closing accounts, consider keeping them open and occasionally using them for small purchases to maintain their activity and positive impact on your credit score.

5. Can paying off a loan lead to a drop in my credit score?
Paying off a loan generally has a positive impact on your credit score in the long term. However, in the short term, it may cause a slight dip due to a change in your credit mix or the closure of an account. This is temporary and should not be a cause for concern.

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6. How can I protect myself from identity theft?
To protect yourself from identity theft, monitor your credit reports regularly, use strong and unique passwords for your accounts, be cautious while sharing personal information online, and consider using identity theft protection services.

7. Can hiring a credit repair company help in raising my credit score?
While some credit repair companies may promise to improve your credit score quickly, it is essential to exercise caution. Understand that you have the right to dispute inaccurate information on your credit report yourself, and there are free resources available to guide you through the process. Be wary of any company that guarantees results or asks for upfront fees.

In conclusion, a sudden drop of 70 points in your credit score can be concerning, but it is crucial to identify the reasons behind it. By understanding the possible causes and taking appropriate actions to rectify them, you can gradually improve your credit score and regain financial stability.

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