What Lowers Your Credit Score (and How to Fix It): Charts, Causes, and Cures

Bad credit can sneak up on anyone. Check out these charts and direct solutions on what drags your score down—and how to rescue it.

What Affects Your Credit Score?

Understanding your credit score is like understanding your financial “GPA.” It’s a number that lenders use to decide things like if you get approved for a loan or how much interest you’ll pay. Several factors, tracked by major credit bureaus (Experian, Equifax, and TransUnion), can lower your score.

Here’s how much each factor influences your score (FICO model):

Payment History: 35%
Amounts Owed (Credit Utilization): 30%
Length of Credit History: 15%
Credit Mix: 10%
New Credit: 10%

Let’s break these down in detail with charts and specifics about what hurts your score—and, most importantly, how to fix it.

1. Late and Missed Payments

Late payments are the number one culprit for a plummeting credit score. Every missed bill (even by a day) can knock down your number, especially if it gets reported as 30, 60, or 90 days late. Utilities, auto loans, mortgages, credit cards—they all count.

What’s at stake?

One late payment: Drop of 90–110 points (if you had good credit)
Multiple missed payments: Even heavier impact, and negative marks stay for up to seven years.

Chart: Impact of Late Payments on Credit Score

Late Payments	Potential Score Drop	How Long It Stays
1 (30 days)	90-110 points	7 years
2 (60 days)	Additional 20-30	7 years
3+ (90 days)	100+ points	7 years

How to Fix It:

Set up autopay or reminders: Use your bank or apps.
Negotiate with lenders: Some may forgive one late payment.
Catch up on overdue bills: The sooner, the better. After that, pay on time, every time.

2. High Credit Utilization

Your credit utilization ratio is the percentage of your credit limit that you actually use. Using more than 30% of your available credit hurts your score.

Example: If your total cards have a $10,000 limit and you owe $4,500, you’re at 45% utilization. That’s too high.

Chart: Credit Utilization and Score Impact

Utilization Ratio	Effect on Score
0–10%	Best
11–30%	Safe
31–50%	Caution
51%+	Danger

How to Fix It:

Pay down balances—the fastest way to improve scores.
Request a credit limit increase—but don’t increase your spending!
Spread out balances—don’t max out one card.
Use “statement cycling”—pay before your statement closes.

3. Hard Credit Inquiries

Every time you apply for a new credit card, auto loan, or mortgage, the lender checks your credit with a “hard inquiry.” Each inquiry can lower your score by up to 5 points, and too many at once signal risk to lenders.

Chart: Hard Inquiries and Score Risk

Number of Inquiries	Impact on Score	Visible For
1–2 / year	Low	2 years
3–4	Moderate	2 years
5+	High concern	2 years

How to Fix It:

Avoid applying for multiple new accounts close together.
Rate shop wisely: Multiple auto/mortgage inquiries in 14–45 days count as one.
Check your own credit: Soft pulls for pre-qualification do NOT hurt your score.

4. Too Many New Accounts

Each new credit account can dip your score. Lenders get spooked if you suddenly rack up a bunch of new credit cards, even if you don’t max them out.

Chart: New Accounts Opened vs. Score Effect

Accounts in 12 Months	Score Risk
1–2	Minimal
3–4	Moderate
5+	Major drop

How to Fix It:

Space out credit applications over months, not weeks.
Focus on quality, not quantity of your accounts.
Let accounts “age” before adding new ones.

5. Collections and Charge-Offs

If you fall behind on payments for long enough, your account may be “charged off” (written as uncollectible) or sent to collections. This is devastating for your FICO score.

Chart: Collections/Charge-Off Effects

Negative Item	Impact on Score	How Long It Stays
Collection	50–100+ points	7 years
Charge-off	100+ points	7 years

How to Fix It:

Pay off collections: Some models ignore paid collections.
Negotiate “pay for deletion” politely with creditors.
Dispute errors: Sometimes collections are incorrect—challenge them!
Ask for a “goodwill adjustment” if the debt is paid and you’ve been a stellar customer otherwise.

6. Defaulting on Loans or Bankruptcy

Major derogatory events like student loan default, foreclosure, or bankruptcy take a heavy toll. While rare, they crush your credit and stay on report for years.

Chart: Major Derogatory Events

Event	Impact on Score	How Long It Stays
Bankruptcy	130–220 points	7–10 years
Foreclosure	100–160 points	7 years
Repossession	100–150 points	7 years
Student Loan Default	90–150	7 years

How to Fix It:

Prioritize secured debts (like mortgages and auto loans) if you’re struggling.
Get professional counseling for bankruptcy.
Rebuild cautiously: Use secured credit cards and pay everything on time.

7. Errors on Your Report

Did you know one in five Americans has an error on their credit report? Mistakes—like a closed card marked as open, late payments you never missed, or someone else’s account appearing under your name—can lower your score unfairly.

How to Fix It:

Check your report free at AnnualCreditReport.com
Dispute mistakes immediately—online or in writing to the bureau.
Follow up—bureaus have 30 days to investigate.

8. Closing Old Credit Cards

Many people believe closing old, unused credit cards is smart. In fact, it removes available credit and shrinks your average account age—both of which ding your score.

Utilization goes up because your total credit limit drops.
Average age of accounts drops if you close your oldest card.

How to Fix It:

Keep old cards open (unless there are high annual fees).
Use them occasionally (small purchase every 6–12 months).

Stuck with Bad Credit? Here’s How to Fix It

Don’t panic—improving your credit score is absolutely possible. The steps below get you back on track, showing up as gradual but steady improvement on your credit chart month after month.

Chart: Credit Score Improvement Timeline

Step	Estimated Time	Boost Potential
Pay overdue bills	1–2 months	10–40 points
Reduce balances to <30%	1–3 months	10–50 points
Dispute credit report errors	1–2 months	20–100 points*
Build on-time payment history	6+ months	20–100 points

*If the disputed error is a major one

1. Make On-Time Payments Your #1 Priority

No hack beats the basic routine of paying every loan, utility, or card on time. Set calendar alerts, use budgeting software, and try automating minimum payments so you never miss one.

2. Attack Debt Strategically

Start with high-interest debt, but make sure all accounts get minimums every month. If you can, pay balances below 30% of each limit—this factor alone can move your score fast.

3. Don’t Close Old Accounts

In most cases, keeping that old department store or student credit card open will do more good than harm. As long as they’re not costing you too much, keep accounts active.

4. Limit Applications

When you need new credit, pace yourself. Don’t go for five cards in a week; space out applications so your report doesn’t show a forest of recent inquires.

5. Dispute and Remove Errors

Check your credit report at least once a year. If you see unfamiliar accounts, incorrectly reported late payments, or suspicious activity, dispute it promptly.

Habits for a Healthy Credit Score

A few routines can keep your credit healthy long-term:

Check your credit report three times a year.
Set up text or email reminders for bills.
Use credit monitoring tools.
Keep balances low (aim for <10% utilization).
Diversify your credit if needed—a mix of cards, loans helps.

Common Credit Score Myths

With so much conflicting information, let’s debunk a few common myths:

“Checking my own credit hurts my score.”
Not true! FICO and VantageScore ignore personal and “soft” checks.
“Carrying a balance helps build credit.”
False. You don’t need to revolve a balance—just use the account and pay it off monthly.
“Paying off collections removes them from my report.”
Not automatically—they can still linger for up to 7 years unless you negotiate deletion.
“All missed bills are reported.”
Typically, bills must be at least 30 days overdue before they’re reported to the bureaus.

Special Focus: Rebuilding Credit From Poor to Good

If you’re starting below 600, rebuilding takes some patience, but it’s doable. Here’s a practical plan:

**1. Apply for a Secured Credit Card **

Put down a cash deposit, which becomes your credit limit.
Use it lightly and pay off in full each month.

**2. Become an Authorized User **

Ask someone with strong history to add you to their card.
Their good habits “rub off” on your credit report.

**3. Get a Credit-Builder Loan **

Your payments are held in a savings account until repaid, then released to you.

**4. Use Experian Boost **

This free service counts utility/phone bills to nudge your score up.

**5. Monitor Progress With Credit Apps **

Free tools like Credit Karma or Experian show you your score and what’s helping or hurting it.

_{Photo by Austin Distel on Unsplash}

Situational Credit Score Tips

Every life event brings its own credit challenges. Here’s how to keep your score safe:

After Job Loss

Contact lenders to request forbearance or lowered payments.
Prioritize essential expenses, but don’t skip payments without alerting your lender.

During Divorce

Close or separate joint accounts to avoid your ex’s negative activity affecting you.
Monitor your credit for unfamiliar charges or new accounts.

After Identity Theft

Freeze credit reports with all three bureaus while investigating fraud.
File a police report and use an identity protection service .

Understanding Credit Score Ranges

It helps to know where your score stands on the spectrum. This can motivate targeted positive habits.

FICO Score Ranges:

Score Range	Credit Status	Loan Approval Likelihood
800–850	Excellent	Almost guaranteed
740–799	Very Good	Very high
670–739	Good	High
580–669	Fair	Some approvals, higher rates
300–579	Poor	Unlikely, very high rates

Just jumping from “Fair” to “Good” can save thousands in interest.

FAQs About What Harms Your Credit Score

Q: How often do credit agencies update scores?
A: Usually every 30–45 days, but some lenders report sooner.

Q: Do medical bills count as much as credit cards?
A: Only unpaid medical bills sent to collections are scored, and many models weigh them less than credit cards.

Q: Can paying off a loan hurt my score?
A: Temporarily, yes—your “mix” of credit changes. But it’s still good to pay debts off!

Q: Should I pay a collection account or leave it alone if it’s old?
A: Generally, pay it off, but ask for deletion—otherwise, it can remain, paid or not, for up to 7 years.

Visual Recap: What Hurts Most?

To cement the biggest threats to your score, here’s a quick reference:

Most damaging:

Bankruptcy/foreclosure/repo
Collections/charge-offs
60- or 90-day late payments

Moderate threats:

High utilization (over 50%)
Too many new accounts
Short credit history

Minor, but avoidable:

Multiple hard inquiries in a short time
Closing old accounts

The Bottom Line

Your credit score deserves regular inspection and proactive care. Know what lowers it, take practical steps to fix mistakes or negative marks, and adopt healthy habits. Over time, what’s hurting your score today can become just a footnote in your financial life—one you’ve already repaired.

Take care of your credit, and your credit will take care of you.

External Links

11 Actions That Can Lower Your Credit Score - Experian Why Did My Credit Score Drop? - Experian Understand, get, and improve your credit score | USAGov 9 Real Ways to Improve Your Credit Fast - NerdWallet Five Things That May Hurt Your Credit Scores | Equifax®