My Credit Score Dropped For No Reason. What Now?

My Credit Score Dropped For No Reason. What Now?

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If you don’t monitor your credit regularly, you should. For those who have great credit, it’s just another way to lift your spirits and remind you how awesome you are. If your credit isn’t great and you’re trying to raise your score, it’s important to check it to check your progress. Whatever your situation is, you may encounter the stunning situation in which your credit score drops for no reason.

Having a good credit score isn’t just a win with prospective in-laws, it’s also important for your financial goals. People looking to finance a home or car definitely need good credit to reduce the hurt of such a large purchase, and business owners can use credit to grow their business. According to a Nav survey, 42% of small businesses rely exclusively on their owners’ personal credit scores and another 53% use a combination of personal and business credit scores. Regardless of your goals or demographic, your score can be your lifeline to growth. If your credit score dropped for no reason, what do you do now?

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Should You Be Worried?

Your first step should be to assess whether or not the situation requires attention or remedy. “Credit scores fluctuate – that’s not unusual. So if your credit scores drop you don’t need to panic” suggests Gerri Detweiler, business credit expert with Nav. For various, normal reasons, your credit score may fluctuate a few points here and there.

In the case of a larger drop, however, you may have reason to take action. “If yours drops dramatically you want to look into it right away. A drop of 15-20 points or more could be due to higher balances reported on one or more of your credit cards – or it could indicate fraud or something negative impacting your credit scores” adds Detweiler.

When your credit score has taken a dive, it’s time to take a closer look and possibly take action.

What to Do Now

So, what do you do? Fortunately, there is a way to not only check more in-depth on your report, but to also dispute false information. Around 25% of small business owners who check their business credit reports found errors.

“If you see your scores drop, check your credit reports. Look specifically at what’s changed and what steps you may be able to take to recover. If you monitor your credit scores using a service, (you can check for free with Nav) you may get information that will help you understand what’s changed” says Detweiler.

Use the resources available to you to understand the problem and get the direction necessary. Having the correct information and items on hand before can make the process of filing a dispute as smooth and quick as possible, and can possibly help your credit escape unharmed.

The Process

Each of the personal credit bureaus (Experian, Equifax, and TransUnion) is required to provide you with a free copy of your credit report once every twelve months. Services like Nav can give you a better insight into your business credit profile. Each bureau has their own dispute process in place, and doing your homework before officially filing will be worth your while.

Staying on top of your finances and balances is also key to being able to catch discrepancies and take care of problems like this. For business credit reports, understanding which accounts report to your credit report as tradelines and which don’t is also key.

The dispute process could be anywhere from a few days to several months, but being prepared and educated on your credit will make the process as smooth as possible and keep you in the game.

Ready to see your credit data and start building better business credit? Check Your Personal and Business Credit For Free (No Credit Card Required).

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About the Author — Connor Wilson is a writer at Nav, a free site giving business owners access to their business and personal credit scores, and tools that match them to the best financing and services.

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