1. New Collection
One more common reason for your credit score to take a quick nose dive is, A new collection hits your credit report seemingly out of no where. With everything that is going on it is increasingly easier to forget about a medical bill, or any other bill for that matter.
2. You Applied For New Credit
Creditors pull your credit when you apply for new credit because they need to see if they can trust you and how you pay your bills. Anytime a credit card company pulls your credit it will be a (hard inquiry) and a hard pull will temporarily lower you credit score an it will stay on your credit file for 2 years.
3.You Made a Large Purchase On your Credit Card
Bottom line with this scenario is this: The higher balance you leave on your credit card the higher your credit utilization will go up, in return this will lower your credit score. The rule of thumb with credit utilization is to keep it at or below 30%.
4.You Missed a Credit Card Payment
Missed payments makes up 35% of your FICO score . this is why not getting any missed payments is so important when it comes to your credit file.
And remember a "Late payment is a Missed Payment".
5. You Closed A Credit Account
Closing a credit card account can wreck havoc on your credit scores as specially if the account that you closed is one of your oldest accounts. How does this hurt your scores?
It lowers the amount the overall credit that you have available to you and it also brings down the overall average age of your credit accounts.
Remember your credit history accounts for 15% of your FICO score.
6. You Paid Off A Loan
Paying off your credit card debt does help your credit scores go up but paying off installment credit can actually make your credit scores go down because it can interfere with your credit MIX (which makes up 10% of your FICO score).
Credit mix is just simply showing that you can manage different types of credit. so don't let this discourage you from paying off any student loans or mortgages.