Why Was My Credit Declined!??

When you check your credit score and notice a small drop, it’s usually nothing to worry about. It’s common for credit scores to fluctuate in small increments. 

However, if you see a large drop of at least 15 to 20 points or more, you should find out the cause. This can help you determine whether it fell based on your actions, a credit reporting error, or possibly identity theft.

To help you answer this question, we’ve compiled a list of potential reasons you may have seen your score dip. You’ll also learn some tips on how to solve each issue so you can improve your credit score.

6 Reasons Your Credit Score can Drop

1. Derogatory Remarks on Your Credit Reports (i.e. bankruptcy, collections, and foreclosure)
2. Inaccurate Information on Your Credit Reports reviews the three major credit bureaus – Equifax, Experian, and TransUnion. You can review all three reports for free at AnnualCreditReport.com. If you believe someone has stolen your identity, file a report with the Federal Trade Commission (FTC) through IdentityTheft.gov and freeze your credit with all three bureaus as soon as possible.
3. You missed a payment – this accounts for 35% of your FICO. Enrolling in autopay reduces the chances of missing any payments.
4. Your credit utilization has increased – this accounts for 30% of your FICO. In general the lower your credit utilization, the better your credit score.
5. One of Your Credit Limits Decreased – watch for lenders reducing your credit limit.
6. You Applied for Multiple credit Products – when you apply for credit, a lender usually performs a hard credit check to review your creditworthiness.  Each credit inquiry can temporarily drop your credit score by up to five points for one year, according to FICO.

6 Things You Should Do If You’ve Been Denied Credit

1. Review the Reason for the Denial
2. Plead Your Case
3. Check Your Credit Report and Credit Score
4. Address Credit Concerns
5. Apply With a Different Lender
6. Continue to Monitor Your Credit

How to Improve Your Credit Score

Get a free copy of your credit report and score so you can understand what is in your credit file. Next, focus on what is bringing your score down and work toward improving these areas.

1. Pay your bills on time
2. Pay down debt
3. Make outstanding payments – get current
4. Dispute inaccurate information on your credit report
5. Limit new credit requests
6. Check into Experian BOOST

What to Do if You Do Not Have a Credit Score

1. Get a secured credit card
2. Become an authorized user on someone’s credit card. (i.e. spouse or family member)

If you have any credit questions or are interested in financing with JX Financial Inc or Alltrux Capital, please reach out to our Finance Experts.  

Your Partner for the Long Haul!

Author:  Connie Marlatt – F&I Executive