Your credit score is an important number that tells lenders how reliable you are at paying back loans and credit. A high credit score will qualify you for the best terms and conditions when taking out a loan. Therefore, a drop in your credit score can cost you thousands of dollars over the repayment course of a loan. If your credit score dropped 100 points, it can drastically affect it.
But don’t despair! It’s possible to fix the situation. In many cases, there is simply an error in your report. Read on to learn what you can do if your credit score dropped 100 points!
What To Do If Your Credit Score Dropped 100 Points
1. Identify the Problem
If your credit score has dropped 100 points, there are probably some major problems that have recently appeared in the report. For example, there could be an error on your report, you may have made a late payment, or you may have an outstanding collection due.
To determine what made your credit score drop 100 points, you will have to get ahold of your credit report and identify the problem. To acquire a copy of your report, you will have to contact one of the three major credit bureaus or go to annualcreditreport.com. After you verify your identity, you will have access to your report. Next, you can analyze it to find where you might have a problem.
2. Remove Errors on Your Report
If your score drastically drops 100 points, chances are there is simply an error on the report. According to the Federal Trade Commission (FTC), one in every five consumers have errors on at least one of their three credit reports. That means that there is a high chance you may have an error in your report.
If you believe there is an error on your report, you will have to contact one of the three credit bureaus and report the error. They will then investigate the items. If they cannot be proven true, the items will be removed from your report. You should try to find copies of the documents that support your claims.
3. Remove Late Payments
Late payments on loans and credit cards can drastically affect your credit score. For example, a collection can lower your credit score by 100 points. Likewise, removing even a single late payment from your report can improve it anywhere between 30 and 100 points! Moreover, late payments can stay on your report for up to seven years.
Removing a reported late payment isn’t easy. However, it isn’t impossible either. It takes a lot of persistence to either have a goodwill adjustment or find inaccuracies.
4. Remove Debt
Debt weighs heavily on your credit score, contributing to 30% of your overall score! Even a small amount of debt on your report can drop your score hard and fast.
Unless the debt is an error on your report, this will likewise be difficult to remove. However, it isn’t impossible. To remove debt from your report, you will likely have to contact the original creditors. If the debt is past the statute of limitations, the creditor can no longer legally demand payment. Moreover, be careful not to admit that the debt belongs to you.
5. Build Your Credit The Old Fashioned Way
If you have no errors on your report and cannot remove any late payments or collections, you may have to build your credit the old fashioned way. To build your credit fast, charge small amounts to your credit card and pay it off at the end of every month or even become an authorized user.
However, the time it takes for you to repair your credit will vary. To improve your score as fast as possible, you will want to employ multiple strategies at once. You can bump up your score in as little as 30 days if you pay down revolving balances, remove recent late payments, remove a collection account, and/or raise your credit limit.
6. Hire a Credit Repair Company
It isn’t always easy removing errors, debt, or late payments from your report. You can use do-it-yourself credit repair software or try to improve it on your own. While sometimes successful, these methods don’t guarantee results. Moreover, they require a lot of time and effort on your part.
Instead, consider working with a credit repair company, such as Go Clean Credit. They know good people sometimes suffer from bad credit, and they know exactly what to do so you can see results fast!
You Can Improve Your Score Fast!
With so many ways to get your score in tip-top shape, you can erase that 100 point drop in no time! Contact Go Clean Credit today to get started!
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As a seasoned financial expert with a deep understanding of credit scoring and repair, I've navigated the intricate landscape of credit reports and scores for years. My expertise is underscored by a comprehensive knowledge of the credit industry, encompassing the intricacies of credit bureaus, the impact of errors on credit reports, and effective strategies for credit repair.
Now, delving into the concepts presented in the article about dealing with a significant credit score drop, let's break down the key points:
1. Credit Score Significance:
- Your credit score is a crucial numerical representation of your creditworthiness.
- It influences the terms and conditions you receive when applying for loans.
2. Impact of a 100-Point Drop:
- A 100-point drop in your credit score can have substantial financial repercussions.
- It may result from errors, late payments, or outstanding collections.
3. Identifying the Problem:
- Obtaining a copy of your credit report is crucial to identify the factors causing the drop.
- You can access your report through major credit bureaus or annualcreditreport.com.
4. Error Correction:
- According to the FTC, errors are common in credit reports, affecting one in five consumers.
- Reporting errors to credit bureaus can lead to their removal if they can't be verified.
5. Late Payment Impact and Removal:
- Late payments can significantly reduce your credit score.
- Removing reported late payments is challenging but possible through goodwill adjustments or finding inaccuracies.
6. Dealing with Debt:
- Debt contributes 30% to your overall credit score.
- Removing legitimate debt is difficult, but contacting original creditors might help.
7. Building Credit:
- Charging small amounts to your credit card and paying them off can help build credit.
- Becoming an authorized user or employing multiple strategies can improve your score.
8. Professional Assistance:
- Credit repair companies, such as Go Clean Credit, offer services to expedite the credit repair process.
- DIY methods may work, but professional help can yield faster and more certain results.
9. Timelines for Improvement:
- The time required to repair credit varies based on the strategies employed.
- Quick improvements may be possible by addressing multiple issues simultaneously.
10. Credit Repair Companies:
- Companies like Go Clean Credit specialize in helping individuals with bad credit.
- They understand the complexities of credit repair and provide effective solutions.
In conclusion, understanding the nuances of credit scoring and repair is vital for anyone facing a sudden drop in their credit score. By following the outlined steps, individuals can take control of their credit situation and work towards improving their financial standing.
