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Don’t know why your credit score dropped?

As you may have noticed, your credit score can change daily. There are many factors that make up your credit score from what shows up on your reports, to your credit usage habits. Your credit reports are calculated by the credit bureaus and you are left with a score which holds your financial reputation.

Inquiries
When you have your credit pulled, whether from a cellular service provider, a car dealership, a mortgage broker or anyone else, your credit score is going to drop. This is called a hard inquiry; A hard inquiry will hurt your credit scores by 3 to 9 points each and will stay on your credit reports for a couple years. Though there is an exception. If you pull your own reports or scores without the intent of checking eligibility for something, that is called a soft inquiry.

If you want to check all three of your credit scores without hurting your credit, we recommend ProCredit. ProCredit has great benefits and is very accurate. If you want to know more about it, call in and ask one of our many representatives.

Credit Usage
If hard inquiries are not the reason for your credit score drop, investigate your bank account! Look at your credit card limits and then look at the used and available credit left on each card. Do you use over 30% of your credit limit?

Let me make it simpler for you…

If you have a credit card with a limit of $500, 30% of that is $150. That means you should never have your balance above $150 on that card! Better yet, if you can keep your usage below 30%, even better. Using only about 10% of your credit limit will help you build your credit.

If you have a credit card with a limit of $1,000, 30% of that is $300.

If you have a credit card with a limit of $3,000, $30% of that is $900.

Do the math or google it if you must and create a budget for yourself. If you keep your balance over 30%, you will see your credit score drop. If you max out your cards, it will surely plummet. This is even if you pay the card in full, on time!