Although Borrowell doesn’t calculate your credit score, we understand that credit scores can be complex. We want to help you understand what your credit score means, along with the reasons it may have decreased.
There are five main factors that impact your overall score and some common reasons why your credit score may have dropped:
Your payment history (35% of your score)
- You made a late payment.
- An unpaid account was sent to collections.
Your credit utilization, which is how much credit you've used out of what's available to you (30% of your score)
- Your credit utilization ratio is too high.
- Your credit utilization ratio is 0.
The length of credit history (15% of your score)
- A tradeline was canceled or closed (credit card, loan, mortgage)
The number of hard inquiries/credit checks when you apply for credit (10% of your score)
- Applying for new credit recently.
Your credit variety: mix of loans, credit cards, phone bills, mortgage etc. (10% of your score)
- An account has dropped off your credit report after being closed for 7 years.
Please also keep in mind that there are additional factors that could cause your score to fluctuate, even if you haven’t done anything differently. These factors include when you make a payment and when the company reports it to Equifax, or when Equifax makes the update to your file in comparison to when you received your refreshed score from Borrowell.
For more information that you may find helpful, please see the related below blog posts.