Why did my credit score drop? And what do I do now?

You checked your credit score and (yikes!) it dipped. Maybe by a few points. Maybe more. If you’re wondering what caused it, you’re not alone.

A credit score can drop for lots of reasons, and some of the most common are also the easiest to miss. Whether you’re a parent managing your family’s finances or a teen just starting to build credit, here’s what to know when your score takes a hit, and how to help it bounce back.

6 common reasons your credit score might drop

If your credit score drops, it doesn’t always mean you did something wrong. Sometimes it just means the credit bureaus spotted a change, like charging more on a credit card than usual. Here are a few of the most common reasons why your credit score might drop:

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1. High credit use. Using more than 30% of your credit limit on any one card.

2. Late or missed payments. Even being a day late can affect your score.

3. Hard inquiries. Applying for new credit can trigger a temporary dip.

4. Charging everything to one card. Even if it has rewards, it can keep your score from rising.

5. Closing old credit cards. It can shorten your credit history, which can lower your score.

6. Errors on your credit report. Even a minor mistake, like an incorrect balance or late payment, can cause a dip.

To better understand how these actions affect your score and how fast things can shift, we asked a few experts to weigh in. 

Michael Foguth, founder of Foguth Financial Group, breaks it down like this: “Most often it’s tied to three things: missed payments, using too much of your credit limit, or a hard credit inquiry. People are surprised by how sensitive their score is to credit utilization—crossing even 30% usage on a credit card can knock your score down 20+ points.”

Another big one? Letting a due date slip past. Even if it’s just by a day, it can come with consequences, both on your score and your wallet. 

Paula Langguth Ryan, keynote speaker and author of Bounce Back From Bankruptcy, 5th edition, explains: “While that missed payment won't show up on your credit report since creditors don't report late payments until they're at least 30 days late, it still affects your score, and can come with hefty fees and a possible increase in your interest rate.”

And sometimes, it’s the things you wouldn’t expect, like paying off a card and closing it, or an error that sneaks onto your credit report. Both can work against you if you’re not paying attention. 

“Closing an old credit card can lower your score because it shortens your credit history. Also, errors on your credit report—like an incorrect late payment or balance—can cause a sudden dip. That’s why regular credit monitoring matters,” says Foguth.

What to do after a credit score drop

“First, pull your credit reports from all three bureaus and check for errors. Then bring down balances as much as possible and automate payments so you never miss a due date,” says Foguth.

Let’s break that down into a few key steps:

• Check your credit reports. You can get your credit reports for free every year from AnnualCreditReport.com. Look for any errors, like unfamiliar accounts, incorrect late payments, or balances that seem off.

• Lower your balances. If you’re using a big chunk of your available credit, try to bring it down to under 30%.

• Turn on autopay. At least cover the minimum each month so you’re never late again.

• Be patient. Most moderate drops start to recover in 3-6 months with consistent habits.

The goal isn’t to panic, but to figure out what changed and take steps to correct it. Credit scores are more flexible than they seem, especially if the drop wasn’t caused by something major.

Tips for families and teens learning about credit

Building good credit is a lot easier when you understand how it works. If you’re introducing your teen to credit or learning the ropes yourself, consistency is key.

“Start by co-signing or opening a low-limit card with your teen that you help manage. Talk about due dates, using under 30% of the limit, and paying the full balance—not just the minimum,” suggests Foguth.

And when it comes to on-time payments, automation is your friend. “Set up all credit accounts on auto payment for the minimum monthly payment,” says Langguth Ryan. “Then make additional payments separately. This way, you never miss a payment deadline.”

If your credit score drops, don’t stress. Check your reports, make a plan, and get back on track. A little consistency goes a long way.

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