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Your credit score is unlikely to drop for no reason, but it might drop for reasons you do not expect. Simply applying for a new credit card, closing out an old one, or being late with a payment can affect your score. A drop in your credit score of 80 points may be enough to reduce your credit score from “good” to “fair,” which can mean you will pay significantly more to borrow money.

Here’s a look at the reasons your credit score might drop, how to monitor your score, and what to do if your credit score drops suddenly.

Why Did My Credit Score Drop 80 Points?

Your credit score is based on factors related to how you manage your debt. Specifically, whether you pay your bills on time, how much you owe creditors versus how much credit you have available, the length of your credit history, the types of debt you have, and how often you apply for a new loan or credit card. Bankruptcy and foreclosures are additional threats to your credit score.

Any one or a combination of these factors could cause your credit score to drop.

Should You Be Worried About Your Credit Score Dropping?

Credit score changes are fairly common and not always a cause for concern. However, an 80-point drop is worth looking into, as it could impact whether you get approved and receive favorable terms for a loan or line of credit.

For instance, if your score drops from 700 to 620, it’s no longer considered “good.” That means that you will not qualify for the best mortgage or credit card rates because a lender will consider you a riskier borrower and could charge you more for financing.

It’s important to first understand why the drop happened so you can correct any issues and begin getting your credit back on track. Monitoring your credit score can be a good place to start, as it allows you to track changes to your score and get insights into your financial health.

Reasons Your Credit Score Went Down

There are a few reasons why your credit score might go down. But bear in mind that it can take over a month for your credit score to update and reflect any changes in your credit situation.

You Applied for a New Loan or Credit Card

If you apply for a new loan or a credit card, your credit score may go down because card issuers will perform a “hard pull,” or hard credit inquiry, when they look at your credit information. According to FICO™, a hard pull typically takes five points or less off your FICO Score. However, if you apply for several credit cards within a short period of time, it could have a greater impact on your score.

Your Credit Card Balance Went Up

If you carry a balance on your credit card, you won’t just rack up interest charges — your credit score might drop, too. Thirty percent of your FICO Score is based on the amount of money you owe. A significant balance on a credit card could cause your score to fall and your credit utilization rate — or how much of your credit limit you’re using on your revolving credit accounts — to rise.

You Missed Payments

Around 35% of your FICO credit score is based on your payment history. Therefore, if you fail to make your monthly payments — or are late making a payment — your score could fall.2 Tools like a money tracker app can help you identify upcoming bills, create a budget, and more.

You Closed a Credit Card Account

When you close a credit card account, especially one you’ve had for a long time, the average age of your accounts falls. That, in turn, could cause your credit score to dip, as the length of your credit history accounts for 15% of your FICO Score.

What Can You Do If Your Credit Score Dropped by 80 Points?

If your credit score drops by 80 points, there are some steps you can take to find out why and to rebuild your credit score.

Ensure Your Payment History Is Correct

Creditors can make mistakes and report inaccurate information to the credit bureaus. Fraudsters can steal your identity and use your accounts. So it’s worthwhile to check your credit report, including your payment history, and dispute any inaccurate information.

You can check your credit report for free from each credit bureau on AnnualCreditReport.com. You can also check your credit report for free with Experian and sign up for monthly updates.

Don’t Miss Payments

A payment that’s over 30 days past due may be reported to the three major credit bureaus. If you fail to make a payment for 90 days, your creditor may refer your account to a collection agency. These records will remain on your account for seven years.

Keep Your Credit Utilization Rate Low

As you use more of your available credit, your credit utilization rate will increase. The higher your credit utilization rate, the more of a risk you are to a lender, and the more your credit score may decrease. Aim for a rate below 30%. For example, if your credit card has a credit limit of $12,000, don’t use more than $3,600, and ideally use $1,200 or less.

Hold Off on Applying for a Credit Card, Loan, or Mortgage

If you apply for a new loan or credit card, the lender will conduct a hard inquiry to check your credit score. As we mentioned, this type of check will only temporarily lower your score by a few points. But many hard inquiries over a short period can have a compounding effect on your credit score. This might occur if you apply for several credit cards at once. The impact of a hard inquiry will typically last a few months to a year.

Avoid Bankruptcy or Foreclosure

Declaring bankruptcy and experiencing foreclosure on a property both cause a significant drop in your credit score. And both stay on your credit report for a long time: seven years for Chapter 13 bankruptcy, 10 years for Chapter 7 bankruptcy, and seven years for a foreclosure.

How to Build Your Credit Score

Building your credit score comes down to sensible fiscal management over time.

Whether your credit score dropped or not, there are steps you can take to help boost your numbers. Examples include:

•   Paying bills on time

•   Checking your credit report regularly for errors

•   Lowering your credit utilization rate

•   Keep spending in check — a spending app can help

Scenarios Where Your Credit Score Might Drop

Here are some scenarios where you might be surprised to find that your credit score has dropped.

You Pay Off Credit Cards

Let’s say you have three credit cards: one with $5,000 in available credit, one with $8,000 in available credit, and one with $500 in available credit. That’s $13,250 of total available credit.

You have a total balance of $3,975 over all three cards, which gives you a credit utilization ratio of 30%.

Let’s also say you take out a debt consolidation loan to pay off all debt except for $250 on the card with a $500 limit. You then close out the two cards with no debt — taking with it $13,000 in available credit. You’ve kept open the card that has a $500 credit limit and a $250 balance.

This might seem like a good move because you’ve paid off over $3,000 in debt and eliminated two credit cards. However, you now have a 50% credit utilization rate, significantly higher than the recommended 30%. This may increase your credit score.

You Close an Old Credit Card Account That You Don’t Use

Another reason to think twice before closing credit card accounts? It could impact the length of your credit history, which accounts for 15% of your credit score. If you close old accounts, it could lower the average age of your credit history, and your score could take a dip as a result.

You Took Out New Loans to Pay Off Debt

Every time you apply for a loan or a credit card, the lender performs a hard pull. If you apply for multiple new loans or credit cards within a short stretch of time, it could temporarily lower your credit score.

Allow Some Time Before Checking Your Score

Credit scores continually fluctuate as information on your credit report gets updated. According to Equifax, your credit score can take 30 days or more to reflect payments you’ve made.

What Factors Impact Credit Scores?

As we discussed, your credit score is calculated based on the following, according to the FICO scoring model:

•   35% of your score is based on your payment history.

•   30% is based on the amount you owe creditors and your credit utilization rate. Ideally, your rate should be around 10% and not higher than 30%.

•   15% is based on the length of your credit history.

•   10% is based on the types of debt you have. A mix of installment debt (such as student loans, mortgage, car loan, personal loan) and credit card debt (or lines of credit) is preferable.

•   10% is based on new credit.

Pros and Cons of Tracking Your Credit Score

There are no drawbacks to tracking your credit score, except for the time it takes to obtain your report.

On the other hand, there are plenty of pros to monitoring your credit score. You’ll know where you stand regarding future loans and what potential lenders will see on your credit report. You’ll also be able to spot inaccurate or incomplete information that you can have removed, which can help boost your credit score.

How to Monitor Your Credit Score

Federal law allows you to view a free copy of your credit report from each of the three national credit bureaus (Experian, TransUnion, and Equifax) at AnnualCreditReport.com. Check the reports carefully, and if you find something you don’t agree with, file a dispute to try to have the information removed.

You can also enroll in a credit score monitoring service. These automated services notify you of changes to your credit report that might occur if you qualify for a new credit card or loan, or fall behind on loan payments.

The Takeaway

Your credit score might fluctuate without you realizing it. But a drop of 80 points may be worth investigating, as it could mean you pay significantly more to borrow money. You might be surprised to learn that if you apply for a new credit card, pay off the balance on a card, or close an old account, your credit score could be adversely affected.

It’s a good idea to obtain a copy of your credit report — it’s free — and check that the information given to the credit agencies is accurate. You can also help maintain a good credit score by not missing credit card and loan payments and by keeping your credit utilization ratio below 30%.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

FAQ

Why did my credit score go down 80 points?

Your credit score is based on factors related to how you manage your debt. Bankruptcy or foreclosure will have an obvious effect on your score, but if you have not paid your bills on time, your credit utilization rate is higher than 30%, or you close old credit card accounts and reduce your credit history, you may see a dip. Also, your credit score may be affected if you apply for a number of credit cards or loans in a short space of time.

Why is my credit score going down if I pay everything on time?

Your payment history accounts for only 35% of your credit score. Other factors include your credit utilization rate, the length of your credit history, and the types of debt you have.

Why has my credit score gone down when nothing has changed?

Even if nothing has changed for you fiscally, you may still see fluctuations in your credit score. There are various reasons why, such as a higher-than-normal credit utilization ratio, inaccurate information in your credit report, or identity theft.

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SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SORL-Q324-014

It may be possible to cancel a money order before it’s cashed and seek a refund. A money order is a type of payment that is very secure due to the fact that the payer purchases the money order with cash upfront. That way, the recipients don’t have to worry about the payment not going through like they would with a check that could bounce.

If for whatever reason the payer needs to get the money order refunded, that can be done before the recipient cashes or deposits the money order. Read on for more insight into how to get a money order refund and other important considerations about canceling or returning a money order.

Why You Might Need to Return a Money Order

These are a few common reasons for requesting a refund on a money order.

•   When a money order is lost. If for whatever reason the money order is lost in the mail, it’s wise to act as quickly as possible to ensure the wrong person doesn’t try to cash that money order. Luckily, money order issuers typically have a protocol established in the event that a money order is lost, similar to how a bank can help you if a check written against your checking account gets lost.

They can either cancel the payment, replace the money order, or refund the money order. These services do come with a fee, but it’s usually much smaller than what the loss of the whole money order would be.

•   When a money order is stolen. If a money order is stolen or fraud occurs, the issuer can take steps to cancel, replace, or refund the money order. Again, it’s important to make this request quickly before the thief gets a chance to cash a money order.

•   When the payment is no longer necessary. In some situations, the payer decides they no longer need the goods or service they used the money order to pay for. In this situation, they may want to cancel it and request a refund from the issuer before it’s cashed, instead of trying to get a refund from the payee after they deposit or cash it.

Recommended: Money Order vs. Cashier’s Check: What’s the Difference?

What Do You Need for a Money Order Refund?

If you decide you want to get a refund for a money order you purchased, it can be a wise move to first track the money order and see if it’s been cashed. If it hasn’t, you can then contact the issuer of the money order so they can share what’s required to issue the refund. That being said, most money order issuers require the following things in order to refund a money order.

•   The receipt. The easiest way to start the refund process is to present the money order issuer with the receipt. If you don’t have the receipt, you can likely contact or visit the physical location of where you purchased the money order to talk through their options for moving forward. With most issuers, you can submit a research request form to have the details of the money order confirmed; there’s often a fee for this service.

•   A completed cancellation request form. Next, you usually need to complete and sign a cancellation request form in order to cancel the money order so you can qualify for a refund. Once the money order is canceled, you can request either a refund of the purchase price or a replacement money order.

•   Method of identification. Usually, presenting your ID is necessary in order to cancel a money order.

•   Money to pay cancellation fee. Most money order issuers charge a cancellation fee, and that fee can increase without a receipt present, as described above. Currently, fees can range from just a few dollars to $15 to $20, varying with the provider and the amount of the money order.

Recommended: Where to Cash a Money Order

Process of a Money Order Refund

Here is a step-by-step guide to what to expect when refunding a money order.

Step 1. Find the Receipt

It’s important to hold onto the receipt for a money order in case the payer does end up wanting to return it. It can still be possible to return the money order without a receipt in some cases, but the process may not be as seamless.

Step 2. Submit a Cancellation Form

In order to qualify for a refund, the money order first needs to be canceled. To cancel a money order, you usually need to complete and sign the cancellation form. At this point, you typically need to show your ID, so this probably takes place in person at a money order purchase location. When you submit a cancellation form, you may have the option of requesting a refund.

Step 3. Pay the Cancellation Fee

It’s important to be aware that canceling a money order usually comes with a fee and that fee can increase when someone doesn’t have the original receipt, as noted above.

How Long Does a Money Order Refund Take?

How long it takes to refund a money order depends on the issuer, but this process can take up to 60 days.

How Much Does It Cost for a Money Order Refund?

How much it costs to get a refund for a money order depends on the fee structure charged by the issuer. All issuers set their own fees, and some may charge more if someone doesn’t have a receipt for their money order. That being said, it can cost between about $5 to $30 to get a refund for a money order with a face value of $5 or more.

Recommended: Can You Buy a Money Order With a Credit Card?

The Takeaway

A money order can often be refunded if it has not yet been cashed. You may want to pursue this process if a money order has been lost or stolen or if it was used to pay for goods or services you have not received or are not satisfied with. There are a few steps to the process, and there may be a fee charged, but it’s usually fairly minimal and is likely worth getting the original amount of money back.

Money orders are just one way to cover spending. A checking and savings account can provide other options.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

Can you get a refund for a money order that has been accepted?

Once a money order has been deposited or cashed by the recipient, it is not possible for the issuer to offer a refund. Because of this, it’s vital to be certain that you want to issue a money order before committing to buying one.

How long do money orders last?

One good thing about money orders is they don’t expire, so the payee can wait a while to cash them. That being said, it’s important not to wait too long to cash or deposit a money order. Usually, if a money order hasn’t been cashed after one to three years, a non-refundable service charge is deducted from the principal amount of the money order and may continue to be charged, which can diminish and even deplete the value of the money order.

How can I tell if someone has cashed the money order?

If someone isn’t certain whether the recipient of their money order has cashed it, they can check the status of the money order with the issuer. Usually, this can be done online on the money order issuer’s website. They may need to provide information such as the money order’s serial number and the issued amount in order to confirm whether it was cashed or not.

Photo credit: iStock/MicroStockHub

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SoFi members with direct deposit activity can earn 4.20% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with direct deposit are eligible for other SoFi Plus benefits.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.20% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 10/31/2024. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.