No, your spouse hasn’t been out gambling. Probably. While it is frustrating to see your credit score drop, it can be equally discouraging to be unsure of the reason. There can be many obstacles in your path to improving your credit score, so keeping in mind the reasons for a drop is important – and here are a few:

Closing a credit card

All your credit card debt has been paid and the account has been closed… logically, a credit score increase should follow, right? Not if the credit card was one you had for a while.

What to do:

Closing cards can be positive if they are secured or have a very high- rate, but if it is your oldest line of credit, it may be beneficial to keep it.

Missing a credit report

There are three different credit scores to be aware of, Equifax , Experian , and TransUnion . While they may look similar, it is important to monitor all three.

What to do:

Check each at minimal every six months to make sure something has not been misreported.

Falling behind on payments

It could be a little credit card balance or a large student loan – making minimum payments every month can be essential to ensuring you don’t see a drop in your credit score. Many institutions provide an automatic payment, a clever tool to apply that can keep you in check.

What to do:

Contact you credit card company, give them the issues why you were late, when you will be able to make a payment and if you can pay anything right now.  If you are proactive, your issuer will tend to work with you.

Applying for credit

When you apply for a new loan or line of credit, an inquiry will be made – which can lower your credit score. Depending on what and how much you applied for, the amount of point loss may differ –

What to do:

Steer clear of applying for another line of credit (like a credit card) for a while if you just applied for something big, such as a car loan.

An account went into collections

When an account becomes past due and gets turned over to collection agencies, it can negatively affect your credit score.  your credit card balance or an unpaid medical bill can result in bringing your score down drastically .

What to do:

Check each at minimal every six months to make sure something has not been misreported, follow the advice above to proactively let your issuer know you are having trouble. If the debt is valid and you can make a payment or arrangements do so asap with the collection agency (try and arrange for lump sum payments, collection agencys can be very difficult to work with) . A collection agency will typically wait 30 days before reporting the debt to the three main credit bureaus.