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It’s an honor to be asked to be a member of a friend’s or family member’s wedding, but it also comes with a cost. Between buying/renting attire, attending pre-wedding events, and purchasing gifts, it can run around $1,650 to be a bridesmaid and $1,600 to be a groomsman.

Just one wedding can take a bite out of your budget, not to mention the familiar scenario of attending several weddings in one year. We’ll help you understand the expenses that go into being a part of the big day so you can prepare and budget well in advance.

How Much Does It Cost To Be a Bridesmaid?

While the average bridesmaid can spend $1,650 to be a part of the bridal party, costs vary significantly depending on location of the wedding, number of events, and dress code. Before you agree to participate as a bridesmaid (or maid of honor), it’s important to consider what costs you may be responsible for.

Recommended: What Are Personal Loans Used For?

The Dress

Etiquette dictates that bridesmaids cover the cost of their dress, shoes, and any accessories the bride has selected for them to wear. According to The Knot’s 2023 Real Weddings Study (which surveyed nearly 10,000 couples who wed in 2023), the average bridesmaid dress cost is $130 per person.

You’ll likely also be responsible for any alterations, which can run from $45 to $150, depending on what adjustments are needed. While there are ways you can save — such as renting a dress — that decision is often not up to the bridesmaid.

Recommended: 2024 Wedding Cost Calculator with Examples

Hair and Makeup

Traditionally, if the bride requests everyone in the party have their hair and makeup done in a certain style, she will cover the cost. If, on the other hand, bridesmaids are given the option to opt in or do their own thing, the bridesmaids generally cover the cost of getting glammed up for the big day. The average cost of wedding hair for bridesmaids is $95, tack on another $90 for makeup.

Bachelorette Party

Bachelorette parties have gotten more elaborate in recent years. Typically, every attendant pays for their own expenses, while also splitting the cost to cover most, or all, of the bride’s expenses.

According to The Knot, the average cost of a bachelorette party in 2023 was $1,300 per person. Of course, the cost of attending a bachelorette party varies significantly depending on the type, location, and length of the event. Celebrations that last between one to two days cost, on average, $1,135 per attendee, while those that go on for three to four days can run $1,630. Also, the farther you need to travel to the event, the more you’ll need to spend. Guests who travel to the bachelorette party locale by plane spend an average of $2,000, while those who travel by personal car spend an average of $900 to attend the event.

Wedding Travel and Accommodations

For the wedding itself, the bridal party is typically expected to cover the costs of travel and accommodations, which can vary significantly depending on the location of the event and length of stay (with members of the bridal party possibly needing to arrive early or stay late).

On average, wedding guests who need to travel outside of their town or city to attend a wedding spend around $456 on travel and accommodations. You could end up spending significantly more if you’re covering travel costs for yourself and other family members, or if the wedding involves long-distance travel. When the wedding is local, travel costs are likely to be minimal.

Recommended: Guide to Saving Money on Hotels for Your Next Vacation

Gifts

Bridesmaids traditionally give shower and wedding gifts, which add to the cost of being in someone’s wedding. According to The Knot, the average bridesmaid bridal shower gift cost between $50 and $75, while the average bridesmaid wedding gift lands at around $170. A group gift may allow you to spend less while giving something nicer than you could afford on your own.

What Does the Maid of Honor Pay For?

Being the maid of honor generally doesn’t cost more than being a bridesmaid, but it does come with additional duties and a greater commitment of time. Generally, the maid of honor is there to assist with any tasks she can take off the bride’s to-do list. They may be involved in planning pre-wedding events and generally take charge of communicating with other members of the wedding party.

In some cases, the maid of honor might plan the shower and help cover the costs. However, these days, the cost of a wedding shower is more commonly covered by family.

Recommended: How to Save for Your Dream Wedding

What Do Groomsmen Pay for?

Groomsmen typically pay for their wedding attire, the cost to attend a bachelor party (which may include sharing the cost for the groom’s attendance), the cost to attend the wedding (which might involve travel and accommodations), as well as a wedding gift. Here’s a look at what it all adds up to.

Formalwear or Tuxedo Rental

Just like bridesmaids generally pay for their dresses, groomsmen typically pay for their wedding day clothing. This might be a suit, tuxedo, shirt and slacks, or another type of attire selected by the groom or couple. Typically the groomsmen’s attire is purchased or rented, but in some cases, a groom will let their wedding party choose from their own wardrobe, which can be a more affordable option.

If you need to rent a tux for the event, costs vary depending on what style, design, brand, and accessories you’ll need to wear. On average, you can expect to pay between $100 and $250 to rent a tux for the standard period.

Bachelor Party

Groomsmen normally take part in planning the bachelor party and may cover their own costs and the groom’s. According to a recent survey by The Knot (which included roughly 500 respondents who attended, or plan to attend, a bach party in 2023), the average cost of a bachelor party is $1,400 per person. The survey also found that the average bachelor celebration lasts for two days, and roughly one-fifth of attendees are flying to the party destination. Indeed, 29% of those surveyed are actually spending $2,000 (or more) to celebrate in a major metro city.

For guests who drove or were planning to drive to the event’s location, spending was less — averaging $1,000 per attendee.

Wedding Gift

Groomsmen are generally expected to give the couple a wedding gift, though they are not expected to spend more on a gift than other guests do. According to The Knot’s 2023 Real Wedding Guest Study, wedding party members spend an average of $160 on their gifts. If you want to save money, consider chipping in for a group gift with other wedding party members.

The Takeaway

It’s not unusual for a bridesmaid to spend $1,650, including the dress, bachelorette party, and gifts. Groomsmen may spend just a little bit less ($1600) for a rental tux, bachelor party, and wedding gift. Keep in mind, however, that the cost to be in someone’s wedding can run much higher or lower, depending on the location and style of wedding.

If you haven’t saved up enough money to be in a friend’s or family member’s wedding in advance, there are better options than throwing it all on a credit card. Personal loans are designed to help cover life’s big events. SoFi Personal Loans offer low fixed rates, no-fee options, and a quick and easy online application process. Checking your rate takes just a minute.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

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.

SOPL-Q324-038

A bathroom remodel is a major project. Whether you’re looking to do a cosmetic refresh or a total gut job with all new high-end fixtures, the process takes planning, time, effort, and money. But the end product can be well worth it: A beautifully updated bathroom can significantly improve your home, bump up its resale value, and make your everyday life more enjoyable.

How much will it cost? Depending on the scope of work, a bathroom remodel typically ranges from $9,000 to $48,000, but many homeowners in the U.S. will pay around $28,500 on average. If you live in a major metro area (where the cost of living is generally higher), however, you may pay as much as $75,000 for a bathroom remodel.

Your bathroom budget will greatly depend on the purpose of your remodel. Whatever you have in mind, these 10 steps can help you plan appropriately, anticipate problems, and ensure you end up with a room you love.

Why Homeowners Remodel Bathrooms

Here’s a look at the most common reasons why homeowners decide to remodel a bathroom. For many, it can be a combination of reasons.

Updating the Look

Happy with the layout of your current bathroom but feel it just needs a refresh? Focus your attention on material selection, and perhaps add new cabinetry or plumbing fixtures. You can find plenty of inspiration online, including ideas for how to make a small bathroom look bigger.

Even if you’re not making a major structural change, you’ll still want to pay attention to the age of your home and the remodels done by previous homeowners. After all, laying new tile over a foundation rife with mold or making do with an outdated electrical system may mean inviting big problems down the road.

Resale Value

If you’re updating your bathroom in preparation for selling your home, think about what potential buyers might look for. While it’s impossible to anticipate what any one individual might want in a new home, you can research your local real estate market to learn what appeals to the majority of homeowners.

You also can find out the resale value of bathroom remodels by using an online home project value estimator.

Better Functionality and More Storage

Perhaps you’ve always hated how the door hits the vanity as it swings open, or you’re tired of stacking toilet paper on the tank and seeing makeup on the counter. Or maybe you never use the bathtub and long for a large shower stall, or would prefer two sinks instead of one to expedite the family’s morning rush. Is your bathroom a dark, moist cave? It may be crying out for more natural light and better ventilation.

This level of bathroom remodel may require gutting the entire space, possibly rearranging the fixtures and rerouting plumbing. Not only will your bathroom be brand new in that case, it could be higher end, too.

Recommended: 32 Inexpensive Ways to Refresh Your Home

How to Plan a Bathroom Remodel

Embarking on a bathroom remodel can be daunting, and there are many parts of the process where things can go disastrously wrong. What follows are 10 steps that can help streamline the process and ensure your remodel is a success.

1. Determine What Your Bathroom Remodel Should Achieve

When starting any home improvement project that requires a good chunk of time and cash, you want to determine what the overall goal is. Is it to expand the existing space? To add a shower or a tub? To improve your home’s value? To update a vintage bathroom to one that is more modern in design and functionality? Your answers will factor into your design and budget.

Other considerations to make when planning a bathroom remodel include:

•   How many people will use the room?

•   How much time do you spend in the bathroom in the morning, afternoon, and evening?

•   What’s your routine? How does your current space hinder it? How could a new space improve it?

•   Do you just want something that’s easy to clean? Or do you want to improve the look for resale?

2. Research and Budget

Before you get too far with planning, it’s good to know how much bathroom you can afford. Depending on the type of bathroom reno you’re looking to do, costs average between $600 and $800 per square foot, according to Remodeling magazine’s 2024 Cost vs Value Report.

Before proceeding with your dream plans, think about whether you’re after a basic update, a mid- to upper-range remodel, or a deluxe spa getaway. It’s also a good idea to factor in a cushion of 20% for unforeseen costs. An online home improvement cost calculator can help you get a ballpark estimate of what your plan will cost.

One way to cut expenses is to avoid moving the existing plumbing and wiring. Some homeowners focus on just a shower remodel, which can run anywhere from $500 to $20,000.

3. Hire the Right Professionals

Given the complexity of rerouting plumbing, laying tile and flooring, and installing vanities and toilets, you may need to hire a few different professionals to get the job done:

•   Interior designer, to reimagine the space and source materials

•   Architect, to handle structural changes

•   Plumber

•   Electrician

•   Tile installer

•   General contractor, to manage them all

What exactly will all these folks be doing, besides spending your money? We’ll walk you through it.

First, a professional interior designer will think of things a homeowner will not. For instance: which way the cabinet doors open, if there’s room for a washer/dryer, how a skylight could brighten the space, or ways to rearrange the room in a creative way that maximizes both functionality and efficiency.

On the other hand, if you know what you want and where to find the products you need — and have an eye for good design — then you might take on the design process yourself.

A general contractor will hire and supervise the various subcontractors, and keep the project on schedule and on budget. If you have DIY experience and are comfortable tackling (or supervising) the demolition, construction, and installation, you may not need a general contractor. Just remember that once you start exposing layers of old work, a straightforward update can devolve into something more complex.

For major structural changes, you’ll want to hire an architect, and consider bringing in an experienced plumber and electrician, too. In some places, it’s required by law.

While you’re keeping an eye on the budget, don’t forget about your valuable time. Even with DIY experience, a bathroom remodel can take homeowners several times as long as a professional to complete — and your results may not be up to your high standards. To keep your budget on track, you might take on simpler tasks like demo and painting and hire out the rest.

Recommended: How to Pay for Emergency Home Repairs

4. Refine Your Bathroom Remodel Plan

If your dream bathroom couldn’t ever fit in the space you have, think about what’s on the other side of the bathroom walls. Can you steal square footage from an adjacent closet, adjoining bedroom, or underused hallway? Is it possible to punch out an exterior wall to add square footage?

Other options to consider: whether you want the toilet out in the open or housed in its own private water closet, and what kind of special storage you may need — for hair tools, makeup, and other everyday essentials.

Choosing the style of bathroom you want can also be tricky. You may love the look of the industrial-style bathroom in your favorite restaurant, but will it look right in your Craftsman bungalow? Designers recommend that you look to the rest of your house for inspiration. You may also want to consult resources like Pinterest for ideas.

5. Approve Your Bathroom Remodel Design

Next you’ll consult with your interior designer and/or architect to review preliminary floor plans and sketches. These will show how the room’s components — shower, vanity, any cabinetry — fit in the space.

At this point, you’ll focus on the big picture: where the major elements go and the functionality of the space. Don’t worry about the finishing touches like colors and materials. These drawings and scope of work will be used to interview contractors and solicit estimates.

6. Get Estimates From Contractors

It’s a common process to get three separate estimates from licensed contractors for each home remodel project in which you bring in professional help. If you’re already working with a designer, they may know skilled contractors or can help you interview professionals to make sure they’re right for the job.

You’ll want to carefully evaluate each contractor’s bid. Don’t let the highest bid scare you, or immediately jump on the lowest bid.

Recommended: How Do Home Improvement Loans Work?

7. Choose Your Bathroom Materials, Finishes, and Colors

Now it’s time to research materials, so you’ll have a basic knowledge of what you need and final costs. Marble may look great, but it’s not stain-resistant and is a pain to maintain.

Maybe you want to look at easy-to-clean options. Or perhaps you didn’t know that wood can indeed work for countertops in bathrooms if properly treated, or you weren’t aware of the vast stone possibilities that could work with your design.

8. Work on Design Development and Construction Documents

At this stage, you should be actively reviewing the floor plan, elevations, tile layout, and any other relevant drawings associated with your project. More planning on the front end of the project can mean fewer mistakes will arise later in the process.

You’ll also want to be kept up to speed on everything that goes into your project: what materials will be used, and how they will be laid out. If something in construction drawings isn’t specified — such as general tile layout or how you want trim pieces in your shower niche to look — chances are your tile installer will make a decision on the spot, especially if you’re not around on the install day.

This stage will also involve pulling permits. If you’re working with a knowledgeable contractor, they will likely take this on. Many are skilled at navigating the process with contacts they’ve made at the local planning office. If you’re doing much of the work yourself, you’ll need to brush up on what permits you’ll need, and where and how to submit drawings for approval.

9. Plan for Installation and Prepare for Bathroom Demo

In an ideal world, you will have every last detail planned and every material picked out and ordered before construction starts. The last thing you want is to get halfway through your remodel and have to tell your construction crew to take a two-week break while you wait for that back-ordered marble to arrive from Italy.

You’ll also want to nail down the nuts and bolts of how construction will flow and where supplies will be stored. You’ll need a dry space inside for most materials, so you’ll need to decide where you’re going to keep displaced furniture and household items while construction is underway. Can you make space in your garage or on the side of your house?

Other questions to consider:

•   Are you prepared for the disruption?

•   What time will the workers be there, and will someone be on-site to answer questions and oversee the construction?

•   Will it affect your work schedule or any trips planned?

•   Where will you shower during construction?

•   Do you have an alternate place to stay should the inconvenience of not having a bathroom become too much?

•   Who in your family will be available should a construction question come up?

Any last-minute decisions need to take top priority to ensure a smooth-running bathroom remodel that stays on budget and on time.

10. Make a Post-Completion Punch List

Despite meticulous planning, it’s likely that something with your bathroom remodel will go wrong. Maybe you overlooked something, materials arrived broken or scratched or not at all, there’s a dent in the wall, or the caulk was too messy.

Now is the time to make a list of these things, either in an informal email or more formal document with your contractor. Get it into the hands of the person responsible for correcting the mistakes and include a date by which the fixes and finish work should be completed.

It’s normal for a contractor to return several times to address any post-project concerns, so try not to worry. Everyone makes little mistakes in a big, complicated project like a bathroom remodel. Just hold off making your final payment until the problems are fixed.

The Takeaway

A bathroom remodel can be a complex and costly project. Before you jump in, consider the purpose of your remodel, the scope of work it will involve, and your budget. Costs vary widely, anywhere from $9,000 on the low end up to $48,000 on the higher end, with the average falling at $28,500. To keep costs down, take the time to plan meticulously and get multiple bids from contractors.

Need a way to finance your new bathroom remodel? SoFi can help. SoFi’s home improvement loans range from $5K-$100K and they’re unsecured, which means that your house is not used as collateral to secure the loan. Checking your interest rate takes just a minute.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

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.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

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.

SOPL-Q324-036

The main difference between a soft vs. hard credit check is that each hard check can knock a few points off your credit score, whereas soft checks don’t affect your score. Both hard and soft checks pull the same financial data but for different purposes. Hard checks are typically done when you apply for a loan or credit card; soft checks are conducted for most other purposes, such as pre-screening for credit card offers.

It’s important for consumers to understand this difference because too many hard checks — also known as hard pulls and hard inquiries — can significantly lower your credit score. This in turn can hurt your chances of getting the best offers on credit cards and loans. Keep reading to learn more about credit checks and how to prevent unnecessary hard checks of your credit file.

What Is a Soft Credit Inquiry?

A soft inquiry is when a person or company accesses your credit as part of a background check. They will be able to look at:

•   The number and type of all your credit accounts

•   Credit card balances

•   Loan balances

•   Payment history for revolving credit (credit cards and home equity lines of credit)

•   Payment history for installment loans (auto loans, mortgages, student loans, and personal loans)

•   Accounts gone to collections

•   Tax liens and other public records

Soft inquiries are not used during loan or credit card applications, and do not require the consumer’s permission or involvement. Reasons for a soft check can include:

•   Employment pre-screening

•   Rental applications

•   Insurance evaluations

•   Pre-screening for financial offers by mail

•   Loan prequalification

•   Checking your own credit file

•   When you’re shopping personal loan interest rates or credit cards

Soft credit checks do not affect your credit score, no matter how often they take place. Some soft checks appear on your credit report, but not all — you may never find out they took place.

When they are listed, you might see language like “inquiries that do not affect your credit rating,” along with the name of the requester and the date of the inquiry. Only the consumer can see soft inquiries on their report; creditors cannot.

Recommended: Does Applying for Credit Cards Hurt Your Credit Score?

What Is a Hard Credit Inquiry?

A hard credit inquiry typically takes place when you apply for credit, such as loans or credit cards, and give permission for the lender or creditor to pull your credit file. As with a soft credit pull, the lender will look at the financial information listed above.

Each hard pull may lower your credit score — but typically by less than five points, according to FICO® Score. All hard inquiries appear on your credit report. While they stay there for about two years, they stop affecting your credit score after 12 months.

Not all loans require a hard credit inquiry — but consider that a red flag. Some small local lenders may offer short-term, high-interest, unsecured personal loans. Borrowers must show proof of income via a recent paycheck, but no credit check is required. The risks of these “payday loans” are so great that many states have outlawed them.

Avoiding Hard Credit Inquiries

Consumers should carefully consider if they really need new credit before applying for an account that requires a hard credit check.

For example, department stores and some chains like to entice you to apply for their store credit card by offering a generous discount on your purchase as you’re checking out. In that situation, ask yourself if it’s worth a credit score hit (albeit a small one).

Another way to minimize hard inquiries is to ask which type of credit check a company intends to run. If, for example, a cable company usually requires a hard credit inquiry to open an account, you might ask if a hard pull can be avoided. Other situations where there may be some flexibility include:

•   Rental applications

•   Leasing a car

•   New utility accounts

•   Requesting a higher credit limit on an existing account

Disputing Inaccurate Hard Inquiries

A good financial rule of thumb is to review your credit reports every year to check for common credit report errors and signs of identity theft. You can access your credit reports from the three consumer credit bureaus (Equifax, Experian, and TransUnion) for free at AnnualCreditReport.com.

To check for inaccurate hard inquiries, look for a section on your credit report with any of these labels:

•   Credit inquiries

•   Hard inquiries

•   Regular inquiries

•   Requests viewed by others

You can dispute hard inquiries and remove them from your credit reports under certain circumstances: if you didn’t apply for a new credit account, you didn’t give permission for the inquiry, or the inquiry was added by mistake.

That said, under federal law, certain organizations with a “specific, legitimate purpose” can access your credit file without written permission. They include:

•   Government agencies, usually in the context of licensing or benefits applications

•   Collection agencies

•   Insurance companies, when certain restrictions are met

•   Entities that have a court order, as in child support hearings

Even so, if you didn’t give permission for a hard credit pull, it’s worth filing a dispute to request that the credit check be removed from your report.

Consumers may dispute hard inquiries online through AnnualCreditReport.com, or by writing to the individual credit reporting agencies.

Hard Credit Checks and Your Credit Scores

As mentioned, hard inquiries appear on your credit report, and each hard pull may lower your credit score by five points or less. Here we’ll go into a bit more detail.

Why Hard Inquiries Matter

Multiple hard inquiries within a short time frame can do significant damage to your credit score. It could potentially be enough to move you from the Good credit range down to the merely Fair. Someone in a Fair credit range can pay substantially more over a lifetime in interest and fees than someone with a Good score or higher.

How Many Points Will a Hard Inquiry Cost You?

As noted above, each hard pull can lower your credit score by less than five points. One or two hard inquiries per year may not matter, especially if you’re not planning on applying for a loan.

If you’re rate shopping for a particular type of loan, such as a mortgage or auto loan, keep in mind that multiple hard credit checks within a specific period (often several weeks) for the same purpose are usually counted as one inquiry by credit scoring companies. However, this is not the case with hard pulls for credit card applications.

How Long Do Inquiries Stay On Your Credit?

Hard inquiries stay on your credit report for two years. While they’re on your credit report, they are visible to anyone who checks your credit. But their impact on your credit score typically lasts less than 12 months.

Soft inquiries may remain on your credit report for one or two years, but only you can see them.

The Takeaway

Soft credit inquiries do not affect a credit score, while hard credit inquiries may cost you a few points. In both cases, individuals or businesses pull information from your credit reports. Checking your own credit report counts as a soft pull, as do most other situations where the consumer hasn’t given written permission. Hard pulls are typically done only when you’re applying for a loan or new credit account.

Many lenders allow you to “prequalify” for a loan without running a hard credit check. This allows you to shop rates without risking any impact to your credit.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

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 .

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.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

SOPL-Q324-025

Seeing a significant dip in your credit score can be disheartening, especially if it’s taken a 60-point plunge. But keep in mind there are many explanations for a drop, including changes to your mix of credit, the age of your accounts, credit utilization, or payment history. Or it could be due to an error in your credit report or even a case of identity theft.

Understanding why your credit score fell by 60 points is an important first step as you work to boost your numbers.

Should You Be Worried About Your Credit Score Dropping?

It depends. It’s not uncommon for credit scores to fluctuate by several points, and a slight drop in is usually nothing to stress about. However, if your score dropped suddenly or has been decreasing over time, it’s a good idea to investigate what might be behind the change.

A lower credit score can have far-reaching effects. It could impact your ability to rent an apartment or secure a home, car, or personal loan with favorable interest rates. And if you’re applying for a job, potential employers may run a credit check.

Why Did My Credit Score Drop 60 Points?

It’s fairly normal for your credit score to change by a few points here and there over time. That’s because credit scores are based on the most recent available credit information reported by lenders and collection agencies — and that information may be received at different times throughout the month. The score you see today may be different a few weeks later.

But if your score dropped 60 points, chances are it happened for a reason. Late payments, an increase in your credit utilization, signing up for multiple new credit cards in a short time frame, or closing an old account could all help explain a dip.

Recommended: Why Do I Have Different Credit Scores?

7 Reasons Why Your Credit Score Went Down

Here are some common scenarios that could negatively affect your credit score.

There’s a Missing or Late Payment

A consistent, on time payment history is one of the biggest factors that determine your credit score. It makes up 35% of your FICO® Score, which is used in 90% of lending decisions.

While missing a credit card or loan payment can happen to anyone, a payment that’s 30 days past due can dramatically lower your credit score, particularly if it’s high. For instance, someone who has a credit score that falls within the good to excellent credit score ranges may see their score drop by 63 to 83 points with one missed payment. Meanwhile, someone with a fair credit score could see a drop between 17 to 37 points, according to FICO.

Your Credit Utilization Is Too High

Credit utilization, or the amount of credit you’re using versus the amount of credit you have available, is also important, as it accounts for 30% of your FICO score.

If you use too much of your available credit, it could signal to lenders you’re overextended and may not be able to keep up with your debts. On the flip side, the lower your credit utilization, the higher your credit score can be. A good rule of thumb is to aim to keep your credit utilization below 30%.

Whether you use a spending app or go the DIY route, creating a budget can help you keep your finances in order and your credit utilization low.

There’s a Mistake in Your Credit Report

Mistakes happen, but they could cause your credit score to fall. Common credit report errors to be on the lookout for include a false late payment, incorrect account balances, a closed account that’s still showing up as open, and a misreported current balance or credit limit.

One way to help spot issues early on? Check your credit report regularly and dispute any errors. You can now check your credit report for free on a weekly basis from each of the three major credit bureaus: TransUnion, Equifax, and Experian.

Recommended: Why Did My Credit Score Drop After a Dispute?

You’ve Closed a Credit Card Account

If you’ve paid off a credit card balance, you may consider getting rid of that card altogether. But that can lower your credit score. That’s because when you close out an account, your overall available credit is lower.

And if that account is older, the length of your credit history decreases, too. Lenders like to see borrowers who have active accounts and a history of making regular on-time payments.

You’ve Recently Applied for Credit

There’s nothing wrong with applying for a new credit card. But keep in mind that every time you apply for a new line of credit or a loan, the lender may perform a hard credit check. (That’s when the lender pulls your credit report to assess your credit history.)

A single hard inquiry will result in a slight dent in your credit score. But multiple hard inquiries could cause your score to drop by as much as 10 points each time they occur.

You Paid off a Loan

When you pay off an installment loan, like a personal or auto loan, the account shows up as closed on your credit report. As a result, your credit mix — which composes 10% of your credit score — may change.

You’re a Victim of Identity Theft

If your identity has been stolen — and thieves open up a line of credit or max out your current credit cards — you may see a significant drop in your credit score.

If you suspect you’re the victim of identity theft, you’ll want to report fraudulent transactions ASAP to your creditor or financial institution. If you think your Social Security number or other important personal information has been stolen, you should report it to the Federal Trade Commission (FTC).

You might also want to contact one of the three major consumer bureaus and ask them to place a fraud alert on your credit report. This lets lenders know they need to take extra measures to verify your identity if they get a credit application in your name.

What Can You Do If Your Credit Score Dropped by 60 Points?

There are several things you can do to get your score back up if it falls by 60 points.

The first thing you’ll want to do is review your current credit report to make sure there aren’t any glaring errors. As noted previously, you can obtain a free credit report from TransUnion, Equifax, or Experian via AnnualCreditReport.com.

Another thing to do is to pay your bills on time, every time. One way to ensure you won’t miss a payment, or pay late, is to set up automatic payments so the money is automatically deducted from your bank account on the due date. Tools like a money tracker app can help you spot upcoming bills and manage payments.

How to Build Credit

Building credit can take time, but here are some strategies to consider:

•   Become an authorized user on someone else’s credit card account. This allows you to reap the benefits of the cardholder’s good credit. Just be sure the person who authorizes you is trustworthy and uses their card responsibly.

•   Get credit for other bills you pay, such as rent or utilities, by having them added to your credit report. Experian Boost, for example, adds on-time payments from other accounts to its credit reports. There are also existing rent-reporting services that can report your on-time rent payments to the credit bureaus.

•   Ask the lender to increase your credit limit. Having access to more available credit without increasing your balance can lower your credit utilization — and potentially increase your credit score. When you make the request, ask the creditor if it’s possible to avoid a hard inquiry, which could cause your score to dip a few points.

Allow Some Time Before Checking Your Score

It can help to think of your higher credit score journey as a marathon, not a sprint. Credit reports are updated when credit issuers send new information to the credit reporting agencies. Typically, this occurs every 30 to 45 days. So if you’re working to correct or dispute errors, or taking other steps to improve your credit score, you may not see an improvement right away.

Similarly, if you open a new credit card, it can take a few months before you see any credit score updates.

Recommended: How Long Does It Take to Build Credit?

Pros and Cons of Tracking Your Credit Score

There are several benefits to tracking your credit score — and some drawbacks to consider, too.

Pros:

•   You can spot mistakes early on.

•   Checking your score won’t hurt your credit because it’s a soft credit inquiry.

•   You can see where you stand financially and how you can improve your score.

Cons:

•   You may be charged monthly or annual fees.

•   You may be frustrated or discouraged with your current score.

•   You could still become a victim of identity theft or fraud.

How to Monitor Your Credit Score

There are a few different ways to check your credit score without paying, although you could pay for the service.

Some companies, including SoFi, Experian, and Capital One, offer a complimentary credit monitoring service. Certain credit card companies and banks also provide customers with their credit score. Another option is to track your FICO score for free at myFICO.com.

The Takeaway

Seeing a 60-point drop in your credit score out of nowhere can be upsetting. But take heart: There are steps you can take to help reverse that decline. By staying on top of your monthly payments, monitoring your credit reports, and keeping credit utilization low, you can help put yourself — and your credit score — back on firm footing.

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 has my credit score dropped 60 points out of nowhere?

Your credit score could have taken a dip of 60 points for a number of reasons, including missing one or more payments, having a high credit utilization, paying off a loan, incorrect information on your credit report, or being the victim of identity theft.

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

Although making timely payments makes up the biggest part of your score, it’s not the only factor. You could be great about paying your credit cards or loans on time, but other issues could be responsible for your score going down. For example, if you’ve closed out a credit card account, that can affect your credit history and credit mix — both of which can impact your credit score.

How to dispute a credit score drop?

Contact the credit reporting company that’s showing inaccurate information on your credit report. Let them know about the error and be prepared to show documentation to back up your claim.

Photo credit: iStock/Neustockimages

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.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

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.

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Many homeowners are flush with equity, and tapping it can be tempting. Some lenders will let you borrow as much as 100% of your home equity — the home’s current value minus the mortgage balance — for any purpose. Your house, though, will be on the line.

Here are things to know before applying for a home equity loan, a home equity line of credit (HELOC), or a cash-out refinance.

What’s the Most You Can Borrow With a Home Equity Loan?

To determine how much you can borrow with a home equity loan, lenders will calculate the combined loan-to-value ratio: your mortgage balance plus the amount you’d like to borrow compared with the appraised value of your home.

Most lenders will require your combined loan-to-value ratio (CLTV) to be 90% or less for a home equity loan or HELOC (although some will allow you to borrow 100% of your home’s value).

combined loan balance ÷ appraised home value = CLTV

Let’s say you have a mortgage balance of $150,000 and you want to borrow $50,000 of home equity. Your combined loan balance would be $200,000. Your home appraises for $300,000. (An appraiser from the lending institution determines your property value.) The math would look like this:

$200,000 ÷ $300,000 = 0.666

Your CLTV is 67%.

If a lender allowed you to borrow 90% of CLTV in this scenario, you would have a loan of $120,000:

($150,000 + $120,000) ÷ $300,000 = 0.900

But just because you might qualify for a loan or line of credit of this amount doesn’t mean it’s a good idea for your personal situation. Consider what the payments, which include interest, would look like and whether your financial situation is secure enough for you to afford them if you suffer a setback.

Three Ways to Tap Home Equity

You paid off a chunk of your mortgage or all of it, or your home value soared along with the market, but now a wedding, college, remodel, or something else has you wanting to put that home equity to use. Here are three ways to do that.

Remember that converting home equity to cash means you’ll be using your home as collateral.

Home Equity Loan

Home equity loans come in a lump sum. They are often useful for big one-time expenses like a new car or swimming pool and for borrowers who know how much they need and who want fixed payments.

Some lenders waive or reduce closing costs of 2% to 5%, but if you pay off and close the loan within a certain period of time — often three years — you may have to repay some of those costs.

HELOC

A HELOC may be helpful for long-term needs such as home renovations, college tuition, or medical bills.

Borrowers who want flexibility when dealing with, say, a home addition may favor a revolving line of credit over a lump-sum loan.

Again, some lenders waive the closing costs for a HELOC if you keep it open for a predetermined period.

Recommended: How Do Home Equity Lines of Credit Work?

Cash-Out Refinance

A cash-out refinance might be a good choice if you want to borrow more than you’d qualify for with a home equity loan or HELOC. A cash-out refi replaces your existing mortgage with a new mortgage for more than the previous balance. You receive the difference in cash.

Homeowners will often need to have 20% equity left in the home after refinancing. Some lenders will let them dip below that minimum but pay for private mortgage insurance on the new loan.

Some HELOC borrowers refinance before the draw period ends. In that case, the cash can be used to pay off the HELOC.

You can change the mortgage term and aim for a reduced interest rate with a cash-out refi. Closing costs will be required; it’s a new loan.

Recommended: Cash-Out Refinance vs HELOC

What’s the Difference Between a Home Equity Loan and a HELOC?

A home equity loan, also known as a second mortgage, comes in a lump sum with a repayment term of 10 to 30 years. It typically has a fixed interest rate.

A HELOC is a revolving line of credit that lets a homeowner borrow money as needed, up to the approved credit limit. The credit line has two periods:

•   The draw period, when you can use the line of credit. It’s often 10 years. Minimum monthly payments usually will be interest only on the amount withdrawn.

•   The repayment period, often 20 years, when principal and interest payments are due.

Most HELOCs have a variable interest rate but cap how much the rate can rise at one time and over the loan term. (Some lenders, though, offer fixed-rate HELOCs or allow the borrower to fix the rate on a balance partway through the loan.)

Some HELOCs require you to draw a minimum amount upfront. Some have a balloon payment at the end of the draw period, when the loan principal and interest are due. Ensure that you understand your HELOC’s terms, and when the draw period ends and the credit line is closed.

How Is a HELOC Calculated?

Qualified borrowers are often able to access as much as 90% of their equity with a HELOC.

Some HELOC lenders require that the homeowner retain at least 20% equity in the home, but a few are more generous.

Is Taking Out Home Equity Right for You?

If you’re aware of the risk, you’ve read all the fine print, and you forecast no job or income loss, tapping home equity can be extremely useful.

HELOCs usually have lower interest rates than home equity loans, but some people prefer the fixed rate and payments of the latter. HELOC rates tend to be a tad higher than mortgage rates, but you only have to pay interest on what you borrow during the draw period.

Most cash-out refinances result in a new 30-year fixed-rate mortgage.

Approval for a home equity product and the rate you’re offered will depend on your credit score, debt-to-income ratio, home equity, and home value.

Shopping around can yield the best offer.

Recommended: Home Improvement Cost Calculator

The Takeaway

How much equity can you borrow from your home? Homeowners who meet credit and income requirements are often able to tap up to 90% of equity and sometimes more with a home equity loan or HELOC. A cash-out refi is another way to make use of home equity.

SoFi now offers flexible HELOCs. Our HELOC options allow you to access up to 90% of your home’s value, or $500,000, at competitively low rates. And the application process is quick and convenient.

FAQ

How can I increase my home equity?

Paying off your mortgage faster, refinancing to a shorter loan term, and making home improvements are some of the ways to boost home equity. In a competitive market, your home value may just naturally rise.

How quickly can I get cash from my home equity?

It depends on the product, but closing can take place in as little as two to four weeks.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

^²SoFi Bank, N.A. NMLS #696891 (Member FDIC), offers loans directly or we may assist you in obtaining a loan from SpringEQ, a state licensed lender, NMLS #1464945.
All loan terms, fees, and rates may vary based upon your individual financial and personal circumstances and state.
You should consider and discuss with your loan officer whether a Cash Out Refinance, Home Equity Loan or a Home Equity Line of Credit is appropriate. Please note that the SoFi member discount does not apply to Home Equity Loans or Lines of Credit not originated by SoFi Bank. Terms and conditions will apply. Before you apply, please note that not all products are offered in all states, and all loans are subject to eligibility restrictions and limitations, including requirements related to loan applicant’s credit, income, property, and a minimum loan amount. Lowest rates are reserved for the most creditworthy borrowers. Products, rates, benefits, terms, and conditions are subject to change without notice. Learn more at SoFi.com/eligibility-criteria. Information current as of 06/27/24.
In the event SoFi serves as broker to Spring EQ for your loan, SoFi will be paid a fee.

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