Why Did My Credit Score Drop?

If you’ve seen a change in your credit score recently, you may be wondering why. There are a number of factors that contribute to a dropping credit score and it is important to know what may be causing that! When buying a home, it is important to maintain your credit and not make any major purchases that could impact your score. Here are the top 5 reasons for a drop in credit:

YOU MADE A LATE PAYMENT

Accounting for about 30% of your total rating, your payment history has a big impact on your credit score. If you make a loan or credit card payment more than a month after the due date, it could cause your credit score to drop. A payment 60-90+ days late will have an even greater impact on your score.

YOU MADE A LARGE PURCHASE

Your credit utilization ratio can largely impact your credit score. Your ratio is how much of your credit you use in relation to your total available credit. The goal is to have a lower ratio so if you’ve been using more of your available credit lately, you may see a drop in your score. If for any reason your credit limit is lowered, it can impact your credit utilization ratio and impact your score.

AN ACCOUNT GOES TO COLLECTION

Timely payments on all accounts is an important part of your credit journey. Late payments on credit cards, loans, to medical facilities, student loans and utilities can be sent to a collection agency, which could in turn show up in your credit report.

YOU OPENED A NEW LINE OF CREDIT

When you apply for new credit, you are giving lenders the permission to access a copy of your credit report, which is known as a hard inquiry on your credit. If your credit report indicates that you’ve applied for multiple new credit lines in a short period of time, your credit score may be impacted.

YOU CLOSED A CREDIT LINE

Closing a card means losing available credit, which could increase your credit utilization ratio. As a result, your credit score may drop. If closing a card helps you stop spending, it may be a good idea. Otherwise, it is usually wise to keep lines of credit open. The length of time you’ve had accounts open shows that you have a solid payment history, so that could be another reason to keep that card you’ve had awhile open if you are using it wisely!

End Your Homebuying Journey On A Good Note

The homebuying experience can vary in length for everyone, but the ending should be smooth no matter how long (or short) it takes you to get to the finish line. Like with any process, there are some steps you can take to make the end much more seamless.

One of the first things you can do is to conduct a home inspection. These are typically performed after the seller accepts your offer to purchase their residence. At the time of inspection, a home inspector will perform a thorough walkthrough of the house and identify any potential problems. The home inspector then provides you with a report that details their findings.

To keep things moving smoothly, it is also important to be flexible. It would be great to be able to close on a home by a specific date of your own choosing, but sadly the homebuying process can be unpredictable with timelines. Delays can happen without notice and you need to be able to adjust your personal timeline accordingly.

The best way to make things move smoothly is to collaborate with a real estate agent. Navigating the homebuying journey is a process, and can require a great deal of work to get a house you love for a good price. By choosing to work with an agent, you can take a great deal of that weight off of your own shoulders. A real estate agent will do everything they can to make your homeownership dream come true and can help with the process they are trained to be experts of!

5 Home Projects To Outsource

We live in a DIY world. If there is a video online for how to do something, there’s a good chance you can figure out how to do it. While saving money by doing certain projects yourself can be rewarding in many different ways, there are some projects that should be left to the professionals. Unless you have training in specific fields, these 5 things usually require a professional contractor:

Electrical Wiring

Without any electrical experience, you run the risk of causing damage to both yourself and your entire electrical system. Even if you do shut off the power before messing with any wiring, there can still be many issues that arise afterwards - including electrical fire. Avoid the danger and call an electrician!

Wall Removal

Knocking down a wall can sound like a fun idea. Even if you were getting excited to release any anger on that wall in your home, this is a time when it is best to call a professional. Walls are a key component in maintaining the integrity of your home and it’s structure. If you accidentally knock down a load-bearing wall, you could cause catastrophic damage.  

Foundation Alteration

The name of the structure itself should already make you proceed with caution. Your foundation is the most integral part of your home, and messing with it without experience could land you in a very tough spot.

Flooring

While some flooring can easily be done alone, some of the bigger projects should be left to the professionals. If leveling the floor is part of the project, it may be time to call someone in. Having a floor that isn’t level can cause you headaches for years to come.

Plumbing

Just like electrical projects, plumbing projects can be extremely complicated. When not done correctly, you can end up with burst pipes, flooding, and interior water damage. Save the stress and call a plumber!