Seeing your credit score fall by 70 points without warning can be alarming. But there are a number of reasons for a dip, including late or missed payments or changes in your credit mix.
Keep reading to learn about what causes a credit score to drop and what you can do to help boost your numbers.
Why Did Your Credit Score Drop 70 Points?
Some changes in your credit score over time are to be expected. The three-digit number reflects the most recent available credit information reported by lenders and collections agencies.
However, if your score has dropped by 70 points, there’s likely a good reason why. And it’s a smart idea to investigate what prompted the dip.
Track your credit score with SoFi
Check your credit score for free. Sign up and get $10.*
Reasons Your Credit Score Went Down
It’s not always easy to uncover why your credit score fell by 70 points, but there are some common scenarios that could be to blame.
• Your credit utilization has increased. Your credit utilization ratio is the percentage of credit you’ve used, based on your total available credit. It makes up 30% of your FICO® Score, which most lenders rely on. If you’ve maxed out the credit limit on one or more credit cards, your credit utilization ratio will likely increase. And your credit score may take a hit as a result.
• You’re late with a payment. How well you stay on top of payments accounts for 35% of your FICO Score, and a payment that’s more than 30 days late can put a noticeable dent in your score. If you have trouble keeping up with due dates, consider enlisting the help of a money tracker app.
• Your account has been sent to collections. Typically, accounts that are more than 180 days past due are sent to collections. This will impact your credit score, but just how much depends on your history. For instance, if you have an otherwise clean credit record, you might see a steeper drop than someone who already has a poor credit score and a spotty payment history.
• You’ve closed a credit card. There are a couple of reasons why canceling a credit card can hurt your credit score. First, you no longer have access to the card’s credit line amount, which could increase your credit utilization rate. And second, if you close a card you’ve had for a long time, the length of your credit history goes down. The good news is, there are ways to cancel a credit card without negatively impacting your credit score.
• There’s an error on your credit report. Mistakes happen — and if one ends up on your credit report, it could negatively impact your score.
• You’re a victim of identity theft. Whether someone opened up a line of credit in your name or racked up charges on your credit card, identity theft can wreak havoc on your credit score.
Examples of Credit Score Dropping
Sometimes, a simple action can cause your credit score to drop without you even realizing it.
Let’s say you have a new credit card that offers a temporary 0% APR for 12 months and a credit limit of $4,000. You’re moving into your first apartment on your own and need to buy new furniture and essential home goods. You spend $3,000 on the card, and plan on repaying the debt in installments over the promotional APR period.
Financially, this might be a smart strategy. After all, you might’ve put your other savings toward the first-month’s rent and security deposit. And paying $250 each month for the next year might be more manageable than repaying $3,000 at once.
However, the move also puts your credit utilization rate at 75%, which is substantially higher than the recommended 30% or below. It can also take some time before you’re able to pay down enough of the balance so the rate drops.
Another example is if you pay off a personal loan. Once you make your final payment, the account is considered closed on your credit report. As a result, your credit mix, which accounts for 10% of your credit score, may also change.
What Can You Do If Your Credit Score Dropped by 70 Points?
Your credit score isn’t a fixed figure. If yours has fallen, there are ways to help it bounce back.
A good first step is to regularly review your credit report and look for errors. You can check your credit report for free each week from the three main credit bureaus: TransUnion, Equifax, and Experian. Visit AnnualCreditReport.com to get started.
Paying your bills on time is another smart strategy. If you need help managing bill paying, consider setting up automatic payments so the money is automatically deducted from your bank account on time each month. Creating a budget, either on your own or with the help of a spending app, can also help ensure you have enough each month to cover your bills.
Recommended: How Long Does It Take to Build Credit?
Should You Be Worried About Your Credit Score Dropping?
While a 70-point drop in your credit score can sting, its impact depends largely on where your score stood before the fall. For example, if your FICO Score was 669, dropping 70 points would still keep you under a “fair” credit rating. However, if you have good to exceptional credit, a 70-point dip could cause your score rating to slip down a rung.
What Factors Impact Credit Scores?
If you want to course-correct a 70-point drop and build your credit, it helps to pay attention to all of the factors that make up your score:
• Payment activity. Accounting for 35% of your score, this factor looks at your repayment habits across all debt types, such as credit cards, home loans, installment loans, and retail cards. Derogatory marks like bankruptcies and collections are also factored in here.
• Debt owed. Thirty percent of your score looks at the balances you owe on your accounts, how many accounts have a balance, and your credit utilization.
• Account age. How long you’ve had your oldest and newest accounts and the average combined age of all your accounts are considered in your score.
• Credit diversity. A healthy credit mix shows you can be responsible for managing different types of credit. This factor accounts for 10% of your score.
• New accounts. The details of new accounts under your credit file make up the last 10% of your credit score calculation. Here, credit scoring models evaluate hard credit inquiries and when you last opened a new account.
Recommended: What Affects Your Credit Score?
How to Build Credit
While you can’t build credit overnight, there are steps you can take to help boost your credit score. Here are a few to consider:
• Pay your bills on time. As we mentioned, payment history can have a major impact on your credit score. Even if it’s just the minimum amount, be sure to send in your payments on time each month.
• Ask to become an authorized user on someone else’s credit card account. This allows you to benefit from the primary cardholder’s good credit and, if the account was managed responsibly, could bolster your credit score.
• Request a credit limit increase. You may lower your credit card utilization by increasing your available credit — and keeping your balance in check. Contact your creditor about an increase, and ask if it’s possible to avoid a hard inquiry. That could ding your credit score.
• See if you can add rent and utility bills to your credit report. Rent-reporting services will report on-time rent payments to the credit bureaus. Similarly, Experian Boost will add on-time payments from other accounts to its credit reports.
Allow Some Time Before Checking Your Score
It can be tempting to see how a small tweak in your repayment and borrowing habits might have changed your credit score. However, checking in too soon might not provide enough time for the impact of the change to take effect.
Instead, let the changes you make take root over a few months before checking your score. And consider checking your credit before a major purchase or if you think you’ve been exposed to a high fraud risk, such as using your credit card or ATM card abroad.
At a minimum, check your score annually to see how much it’s changed.
How to Monitor Your Credit Score
You can pay to access your latest credit score directly from the credit scoring model that you’re interested in. However, many banks, card issuers, and lenders provide complimentary access to your credit score.
For example, Chase lets you see your VantageScore for free,, while Wells Fargo customers can access their FICO score at no additional cost. Log in to your account online to see if your lender or card issuer provides credit score monitoring through its portal, or contact them directly.
Credit score monitoring tools also keep you informed about changes to your score.
The Takeaway
Seeing your credit score drop 70 points can understandably put you on edge. But keep in mind there’s an underlying reason for the decrease, even if it’s not obvious. A change in your credit utilization, a shift in your credit mix, or a string of late payments can all take their toll on your score. Fortunately, over time you can take meaningful steps to recover from the 70-point drop, including checking your credit report and disputing any errors, paying bills on time, and managing how much available credit you use.
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 randomly drop 70 points?
There are many reasons your score might unexpectedly drop 70 points, including an increased credit utilization ratio, late or missed payments, or a closed credit card or loan accoun.
Why did my credit score go down when nothing changed?
Credit scores can fluctuate even if it seems like you didn’t do anything out of the ordinary with your credit accounts. If you recently applied for a new loan or credit card, for example, a hard inquiry might temporarily knock your score down a few points.
Why is my credit score going down if I pay everything on time?
Paying your credit cards and loans on time positively impacts your credit score, so keep this habit going! However, if you’re making on-time minimum payments and not repaying each statement balance in full, your credit utilization might be increasing. To prevent the negative effect on your credit, keep your utilization under 30% — and ideally lower than 10%.
Photo credit: iStock/svetikd
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-Q324-015